vision has been very well changed to provide | when you come to all the other matters, and ining the law, I am satisfied, as the Senator for the appointment of a specific number, not especially in districts where there are no spir- | from Maine is, that it did uot do that, that it exceeding twenty. You want as many as may its and tobacco manufactured, you must have abolished the special and general agents, but be needed for the districts in which spirits are the local knowledge of this set of men, because leit the district inspectors. The question was distilled and tobacco is grown and manufac. you see that if you strike down the inspectors i then with the committee whether we should tured ; and if twenty are enough-upon that I you have no local agents except the collectors continue these local officers in their offices or give no opinion-I am willing to agree to it, and assessors and their assistants, who have whether we should provide some other mode and make them general supervisors, though the duties of their own to attend to, and they will of detecting frauds; and that is the question object is undoubtedly to supervise those par- not do and never have done this particular presented to the Senate. ticular manufactures.

kind of business, and that is the reason why After consideration we thought it better to Then it will be observed, and I call the inspectors have been found necessary more or give to the Commissioner of Internal Revenue attention of the chairman of the committee less in all the States. There has never been | authority to employ temporarily, from time to to the provision, that they afterward dispense | but two in the State of Maine, and they have || time, upon compensation to be fixed by him, with general agents in the section which is been found sufficient. I suppose there has not dependent on the character of the service, now under consideration, but they do retain been more than one in the State of New Hamp- | contingent or absolute, a certain number of the local inspectors. In conversation with shire and one in the State of Vermont, though | inspectors or detectives, because they are dethe honorable chairman he thought it was not perhaps there may be two in each of those | tectives, with authority to send them from the intention to retain the local inspectors, States. You want the local knowledge of Washington wherever he might have reason but by looking at the preceding section he will such men and the bestowal of their time upon | to believe a fraud bad been committed. For see that it was the intention to retain them, | ascertaining what the revenue ought to be. instance, there is a famous detective in the because if you look on page 59 you will see For the reasons I have stated I do not think || city of Chicago who it is believed can pursue that in speaking of the power of the supervisor that the substitution of these fifty agents who any kind of fraud or allegation of fraud until of internal revenue, it is said:

may be sent away to distant places from time he solves the riddle; and it is said that no one “He shall have power to transfer any inspector, to time, as the Commissioner may see fit to can avoid his detective power. It is important gauger, or storekeeper, from one distillery or other send them, will be of any essential service. I sometimes for the Commissioner of Internal placo of duty to another, or from one collection dis

have seen that done in other cases. After a Revenue to have it in his power to employ trict to another within his district, and may by notice in writing suspend from duty any inspector, gauger,

fraud has been committed an agent is sent to persons of that kind, men of great experience, or storekeeper."

look it up and settle it, but that is after the to whom large pay has to be given ; sometimes, And then in the succeeding section they thing takes place. An agent of that kind can- perhaps, contingent pay. It was thought betabolish the Treasury agents, special and gen- not look after the things of which I have been ter to entrust him with this power to employ eral, but say nothing about inspectors. Now, speaking. If you are to provide for such || temporary service, even if it costs more, in the Committee on Finance have provided for agents, you had better have a smaller number | order to follow out threads of fraud which may another class of officers, who are in fact gen- and leave the loeal inspectors to be appointed | be in his possession from other oflicers. These eral agents, and authorize the Commissioner | in such districts as the Secretary of the Treas- inspectors are merely local officers; they, perof Internal Revenue, "whenever in his judg. | ury or the Commissioner of Internal Revenue, haps, have their affinities, their likes and disment the necessities of the service may require no matter which, shall think necessary. Oth- likes in the district. They may not have the them, to employ competent persons, not ex- erwise my judgment is that you will lose a great | general knowledge and information required ceeding fifty in number at any one time, whose deal of your revenue, especially that revenue for this service, and at four dollars a day they term of service shall continue at the pleasure which is derived from incomes.

are not likely to have. Their pay is too small of the Commissioner;" and then they strike I hope, therefore, that this amendment will to secure the character of service needed, and out all the district inspectors, by adding the not be adopted, but that the section will be left we propose to give to the Commissioner of words:

substantially as it was passed by the other | Internal Revenue power to secure the service That from and after the passage of this act no gen- House originally. I think it will work much | he needs. eral or special agent, by whatever name or designa

better and produce a better effect. I am told The Senator may be correct in supposing ţion he may be known, of the Treasury Department in connection with the internal revenue, and no dis

that the Commissioner of Internal Revenue that it is proper to give him a certain number trict inspectors, except as provided for in this act, favors this view of the case, and I think, unless of district inspectors, and the amendments are shall be appointed, &c.

he has changed his opinion entirely from what | in such shape that the Senate can divide them; It may be very well to substitute gaugers and he said to me, he would be opposed to striking | but I consider it vital to give the Commissioner inspectors and supervisors in districts where out all provision for local inspectors, and the of Internal Revenue power to employ the kind tobacco is raised and manufactured, where Senator from Ohio will see by looking at the l of service he needs. The present Commisthose officers may be needed; and perhaps a latter part of the previous section that that was sioner will go out soon; but whoever is at the small number of general supervisors all through not the design of the House. I hope that this head of the office should have power to employ may be useful; but in other districts, in my amendment will not be adopted, or, at any rate, the best detective talent in the United States judgment, you cannot dispense, and it was not if it is, that the number provided for will be of America for the time being to follow up any the intention of the House of Representatives cat down, and the local inspectors left wherever frauds that are alleged. evidently to dispense with the local inspectors | the Commissioner may see fit to appoint them, When we reached this section last night the altogether. The number of them has always as there are some places where they will be Senator from Illinois (Mr. TRUMBULL) and the been within the control of the Secretary of the absolutely needed.rs

Senator from Vermont (Mr. EDMUNDS) adTreasury. The Secretary by this new provis. Mr. SHERMAN. I hope the Senators pres- mitted the importance of this service, admitted ion will undoubtedly be relieved of the neces- ent will give me their attention for a few min- that fifty was not an unreasonable number, sity of appointing a great number of them; utes while I state the reasons that actuated the admitted that the mode and character of but if Senators will tliink a moment they will committee, and then they can decide as to the employment here proposed was advisable, but see that the information gained by local in- best class of officers to be employed for the they said they were troubled with a constispectors, which they have of the business of

detective service. The existing law provides | tutional difficulty; that as the Constitution their immediate neighborhood, of the property for detective service, for revenue agents, spe- conferred the power of appointment of inferior of men, of the income of men and ihe busi.

cial agents, and revenue inspectors. The du- | officers upon the President, the heads of Deness which they do, is absolutely essential to ties of inspectors are defined by existing law, | partments, or the courts of law, according to the collection of the revenue, more especially and the provision in regard to them is : the discretion of Congress, these persons could that part of it which arises from the income

"That the Secretray of the Treasury may appoint

not be employed temporarily by the Commisinspectors in any assessment district where in his sioner of Internal Revenue because the employI cannot give a better example of it than judgment it may be necessary for the enforcement

ment is not by the President, the head of a my own State. We distill no liquor there ; we

of internal revenue laws or the detection of frauds,
and such inspectors and revenue agents afore-

Department, or a court of law. I did not think raise no tobacco there. The revenue, such as said shall be subject to the rules and regulations there was anything in that suggestion, and I there is, is derived from other sources. Of of the said Secretary, and have all the powers con- do not now. what use in the world for looking up the ferred upon any other oficers of internal revenue in officers who are neither heads of Departments

There are more than a dozen making any examination of persons, books, and sources of revenue there would be these

premises which may be necessary in the discharge of nor courts of law who are now authorized to agents, of whom there may be fifty, who are to the duties of their office. And the compensation of employ persons in just such language as is be sent wherever the Commissioner may want

such inspectors shall be fixed and paid for such time to send them? He will only send them in

as they may bo actually employed, not exceeding used here. The Superintendent of the Gov.

four dollars per day and their just and proper trav- ernment Printing Office employs a whole army cases where he fears there may be fraud. eling expenses.

of people and fixes their pay almost without They will not be on the spot, will not have the They are local officers appointed for detect- any limitation, or with only a general limitapower to know what the property of men is, ive service only; they have no powers except tion. In the navy-yards hundreds of people or the income of men, or the business of men simply for the detection of frauds and look are employed every day on indefinite pay, not that produces income. You want local knowl

after the observance of the revenue laws. The by the head of a Department, but by a master edge on these points.

House of Representatives, by section forty- | workman, an inferior grade of officer. The I Mink it vastly better, therefore, and it will || eight of the bill, undertook, as we supposed, officer in charge of the public buildings and work a great deal better, to leave the provision to strike out all detective officers and special grounds in this city employs great numbers of as the House of Representatives had it, and agents. The Commissioner of Internal Rev.

persons. So of the architect of the Treasury rely upon your storekeepers and gaugers and enue had the impression, and so stated to the extension. I thought over this morning of more supervisors with reference to the two great || coinmittee, that the section repealed all author- than a dozen officers who now exercise the sources of revenue, spirits and tobacco. But ll ity to employ district inspectors; but on exam- power, according to law, of employing and

tax.

a

&

discharging people and fixing their pay: so time presupposes that there is to be fraud Mr. FESSENDEN. Very well; I make no that I think there is no constitutional difficulty. | going on continually of an enormous character objection to the number.

Mr. FESSENDEN. None at all. This is all over the conntry, and that he must have a The PRESIDING OFFICER. The quesnothing but an employment, not an office. large force of detectives. It strikes me that tion is on the amendment proposed by the

Mr. SHERMAN. So I said last night; but if he were limited to a less nuinber it would Committee on Finance. these learned lawyers thought there was some answer the purpose, though of course if you Mr. CAMERON. Mr. President, I have a grave constitutional question. I think reflec- have a good otficer he will not use any more few words to say in regard to this bill. tion must convince anybody that the power to than he wants, and so no harm will come by Mr. FESSENDEN. I ask the Senator if employ persons temporarily in the discharge providing for fifty. But the Senator will per- he will not let us dispose of this section. of the duties devolved on an officer may be || ceive, and the Senate must see, that these men

Mr. CAMERON. I would rather not. i confided to that officer, and it is not necessary are only to be used on special occasions to hunt have been waiting for an hour and a half tu to have those persons appointed by the Presi- out particular frauds, and they are to be sent get an opportunity to say what little I desire dent and Senate, or by the President alone, from Washington for that purpose. It is well to say, and I think I may as well do it now as or by the head of a Department, or by a court that there should be such a class of officers; at any other time. of law.

but they do not make up for the constant vigi- Mr. FESSENDEN. I have been waiting If there is no constitutional objection to con- lance and supervision of officers who are on here all day to get a chance to have this quesferring this power upon the Commissioner of the spot. The small leaks are constantly oc- tion settled. Internal Revenue, there are many reasons why || curring and it needs vigilance and care to guard Mr. CAMERON. To satisfy the Senator I it ought to be conferred upon him, and not against them. These detectives can know noth- will begin my remarks by reference to the upon the Secretary of the Treasury. The Com | ing about them and can find out nothing about motion now before the Chair, and by saying missioner of Internal Revenue is charged with them, whereas a vigilant and careful local offi- that I agree perfectly with the Committee on the important duty of enforcing the revenue cer on the spot, looking at the manner in which Finance as to the machinery for collecting the laws; the power of the Secretary is simply the collector and assessor perform their duties, tax on whisky. I think it was very well gotten supervisory It may be vitally important to and looking up the sources of revenue can ren- up by the Committee of Ways and Means of give the Commissioner of Internal Revenue der very great service to the Treasury. I speak the other House, and was in very good shape power to detect offenders, even without the of that from some little personal knowledge, when it was passed by the House ; but the knowledge of the Secretary of the Treasury. for I have known of cases where they have Finance Committee of the Senate have per. The Secretary of the Treasury is a political | been of great value. You get men that are officer, more or less affected by political influ- shrewd, men that devote a certain portion of great improvements on it. Hitherto one great ences, and disposed to appoint persons to office their time to that business, what is necessary, trouble in collecting the tax on whisky has for political reasons. If a detective applied and they get their four dollars a day. You been in the means provided for doing it. Now, to the Secretary of the Treasury for office, he can find shrewd men who are willing to take the difficulty I have with this measure is not would have to show that his political opinions that, and who do.

in regard to the mode of collecting the tax, were those of that great officer in position at Under these circumstances, while I am per- but it is with the bill itself, the time. In order to make his application to fectly willing that as many of these detectives Mr. President, I cannot give my consent to the Secretary, he would have to be right on to be at the command of the Commissioner of the proposed reduction of the tax on whisky, political issues. But if the Commissioner of Internal Revenue as he may need, shall be from two dollars to fifty cents per gallon. The Internal Revenue, having a suspicion of fraud granted to him, and approve very much of that arguments in favor of such a reduction are or collusion in any collection district, or desir. idea and certainly do not design to make any forcible, but they are not convincing to my ing to watch the conduct of any subordinate, opposition to it, yet I say, will not do, un mind. was at liberty, without consulting any one, to less you mean to leave all chances of small From the beginning of the whisky frauds it just say to Mr. Pinkerton or any one else, || leakages open, not to be looked after, which has been the custom of dishonest distillers to You go and follow out this suspicion of in the end amount to a great deal, to dispense place about one eighth of the amount manumine; see whether there is any ground for it; with the local inspectors; and as I said before, factured in bond, with the intention of abando whatever is necessary to detect it, and I will it is quite evident that the House of Represent. doping that portion to the Government. It pay you a liberal compensation dependent on atives did not mean to dispense with them. was not possible, even for the "whisky ring," the character of the service," it might be of They perceived the necessity of having them to steal all the tax levied, and this bonding of great advantage to the Government.

still kept. Undoubtedly the number will be a small part of the manufacture was the result That power ought to be exercised, and it very much diminished, when you have ap- of shame rather than of duty to the Governseems to me that the number of these cm. pointed the gaugers and storekeepers and super

By abandoning a fraction, whenever ployés is not too great under all the circum- visors for whom this bill provides. The prob- payment became necessary, the pretext was stances. Still, if the Senate think fifty are too ability is that the committee were led to secured for swindling the revenue of tho tax many at any one time, they can reduce the strike them out from the consideration that on the remaining seven eighths boldly thrown number. Even if the Senate think it important | they were legislating in this bill for nothing on the market, and that proportion of the tax to keep these revenue inspectors in certain except liquor and tobacco. That is nominally was openly stolen from the Treasury. districts they ought to furnish the Commis- so; but by changing the whole phraseology of Mr. Schenck, the chairman of the Ways sioner of Internal Revenue with these agents these sections as the Committee on Finance and Means Committee of the House, gives to follow up the system that is proposed by this propose, they dispense with all these other offi- the amount of whisky now in bond at more section. At present the Commissioner of In- | cers who are needed for other things, a sepa- than twenty-five million gallons. The Gov. ternal Revenue has not a single officer having rate class entirely. Whatever the Senate may ernment now has a legal lien of two dolhis entire confidence, whom he can appoint | do with the first amendment to the fiftieth lars per gallon on this whisky, amounting to and set to work in the discharge of this duty. section, I hope they will strike out the other, $50,000,000. By this bill we deliberately The special agents and revenue agents are not which dispenses entirely with the local inspect- forego our legal rights to $1 40 on each galappointed by him, but are appointed upon po- ors, for I am satisfied that many of them are lon of this whisky. By reducing the tax to litical influence. There are now three or four exceedingly useful and that as a class they are sixty cents we make a present of $40,000,000 hundred of them scattered over this country necessary to be kept.

to those who have been constantly and systhat do not do much else than attend to politics. The PRESIDING OFFICER, (Mr. An- tematically robbing us. Would it not be This bill wipes them out, dispenses with them THONY in the chair.) Does the Senator from wiser to adhere to the two dollar tax, and entirely. By another law the number of gen. Maine ask for a division of the question? realize the $50,000,000 now due, or, when the eral revenue agents was entirely unlimited, but Mr. FESSENDEN. No, sir; the amend- proper time arrived, confiscate and sell this by this bill they are abolished. Not one of ment as it stands is an amendment proposed iwenty-five million gallons at the market rate, thsese persons can now be called upon by the by the committee. I express the hope that it and so secure $37,500,000, or about twice as Commissioner of Internal Revenue to perform will not be adopted. I had thought of propos- much as has ever been paid in one year from this important duty, because they are all ap- ing to limit the number; but if the committee this source of revenue, which should pay us pointed either for political reasons or for local say that they are satisfied that even if you keep $200,000,000, and to that extent relieve the reasons as local agents. the local inspectors there ought to be as many

honest industries of the country. As this is a divisible amendment, I trust the as fifty of these agents I will withdraw any

It is claimed that an increase of revenue Senator from Maine will first allow the ques- opposition and yield my judgment to that of will follow a reduction of this tax as proposed tion to be taken on the first clause.

the committee who have examined the subject. in the bill before us. I doubt this very Mr. FESSENDEN. The Senator has con- My impression is that the Commissioner can- seriously. Whisky can be produced, I am vinced me-in fact I made no opposition toit- not want as many as fifty at any one time to informed, for forty cents per gallon. The of the wisdom of putting it into the power of investigate matters in different parts of the poposed tax of fifty cents is one hundred and the Commissioner of Internal Revenue to em- country, because they are to investigate only twenty-five per cent. of the cost of production. ploy these detectives; but according to his own particular cases for which they are sent. I believe it is much more. But I take the showing they are only needed on special occa- Mr. SHERMAN. In regard to the number figures as I find them. The amount annually şions. When the Commissioner thinks there I will say that it was fixed after full conference distilled is, say, one hundred million gallons. is necessity to investigate affairs in any one

with Mr. Rollins. He thought fifty might On this vast amount a tax of fifty cents per district, he sends an agent he can trust. That sometimes be useful. Sometimes two or three gallon is enough to excite the cupidity of the is very well; he should have that power; but may have to be sent off ou the same errand. rogues who have been defrauding us, and those things do not occur every day, and there- As a matter of course they will not be em- enough to satisfy even the greed of the “whisky fore it strikes me that the number of fifty at one ployed unless their services are required. ring." For if, under the reduced rate, we

ment.

upon it,

collect as much as we now do, and I have no Ways and Means, at the beginning of this session so stolen they may carry the elections next idea we will collect more, there will remain declared that the two-dollar tax could and November. Will gentlemen who make this a unpaid and stolen the sum of $30,000,000 a would be collected. This opinion prevailing, | pretext for voting a reduction of the whisky year as a premium on villainy.

another large remission of taxes (about one tax be good enough to demonstrate, if they I am satisfied that it is not good policy to hundred million dollars) was made in favor of can, that the people can be bought, and, if so, reduce this tax now. It is a virtual admission the manufacturers. The result of all this must | why the $10,000,000 we now present to the that we cannot enforce the laws. The remedy be a large deficit. What assurance have we “ ring' owning the bonded whisky is not sufdoes not lie in a modification of the laws, but now that an increased revenue will follow a ficient for their purpose ? in their enforcement. It may be that for a few diminution of this tax. What fair reason have If money stolen from the revenues can elect months longer we must continue in the dis. we to hope that we can again restore this tax, a Democratic successor to Johnson, does any graceful attitude of a Government unable or when an honest Administration shall make its sane man doubt that it will be stolen? I do unwilling to execute its laws. But had we collection possible? I have no idea that a not, for an instant doubt this, but I am determnot better continue the struggle until an honest reduction of the tax will yield or'secure an ined that they shall steal this money and Administration under Grant shall relieve us, increased revenue, nor have I any hope that we bear the odium of the theft, and by no means than to abandon the contest to a corrupt com. may restore thetwo-dollartax if we now abandon wheedle me into voting a corruption fund of bination of law-breakers and escaped crimi- it. 'If I am right, I know that an enormous $40,000,000 into their pockets to enable them nals leagued in this stupendous villainy? There deficit must result from such legislation as this to defeat that man whom no one else has ever are plenty of men in this country who have bill contemplates, and that this deficit must be defeated. both the nerve and the integrity to collect this made up by taxation which shall press with

Mr. BUCKALEW. I suggested some objectax; and when it shall become possible to severity upon interests now staggering under tions to this particular amendment last evening, secure the appointment of one such any tax heavy burdens.

which I will now repeat with some additional we may choose to levy will be collected, depend I cannot approve legislation which makes | thoughts which I will state.

such a danger possible, and I submit to Sen- Here are a large number of appointees pro · To surrender to this organized theft, and to ators whether we ouglit not now to insist on vided for without any designation; no name admit the " whisky ring" to be the masters of the retention of the tax at two dollars per | given. What are they to be? Commissioners, the Government, may meet with favor from gallon, and throw on the present Administra- | agents, superintendents, inspectors? They are those to whom peace is precious; but it will tion and its supporters the odium of cheating || called “persons,' the most general term which not satisfy minds used to grappling with diffi- the revenue at every point and on every pre I could possibly be selected. culties, and to overcoming opposition. We

text. By continuing to fight this universal In the next place, it is a little remarkable have the unquestioned right to levy whatever tax corruption until a new order of things shall that there is not the slightest attempt to define we please on whisky, and I am one of those relieve us, we not only do our duty, but we their duties; the section does not prescribe who believe that we have the power to collect | lay bare the robbers, whose shameful thefts what they shall do! They may do anything, whatever we may choose to levy on this purely are the cause of so much danger and so much so far as this amendment is concerned, that luxurious product. The English Government national disgrace, and we will fill the Treas- the Commissioner of Internal Revenue tells levys, and collects, ten shillings, or $2 47 per ury by a tax of which no one will complain. them to do. Are they to be engaged in inspectgallon on spirits, and I am unwilling to admit, One very important consideration with me || ing establishments on which taxation as imby the proposed reduction, that we are not is that we should give permanence to such || posed? Are they to examine and assess propequal to the task of collecting our revenues. laws as affect values. An honest manufacturer erty? Are they to make collections of money A nation which suppressed the

rebellion should of whisky is not so anxious about the sum per that is to come into the Treasury under the not be guilty of this disgraceful surrender to gallon you tax his product as he is that the revenue laws? Are they to detect frauds, purthe “ whisky ring." The immense majority sum shall be fixed and reliable. It is large sue investigations with reference to those indi. of the American people respect the laws, and operators and speculators who are benefited rect and corrupt influences which we encounter pay, without resistance, what you impose upon by these changes in the revenue laws.

in administering our system? What are they them ; in their name I protest against the At this moment it is publicly announced that to do? The amendment does not inform us. passage of this bill, because it still further one of these wealthy speculators has bought I venture to say this is the most vague and oppresses the honest tax payers to enrich that an interest in bonded whisky, so large that he indefinite designation or appointment to public band of thieves who have conspired to defy | actually controls the whisky in bond, and the duty of which our legislation bears any account. your laws, and to debauch and corrupt your | price of it in this country. This immense Again, sir, it is a little remarkable that public life. That conspiracy has already suc- interest has been bought by this man for ten while compensation is provided for, no rate is ceeded in making the revenue service a nest cents per gallon, and the passage of this bill | fixed. Here are tifty persons or officials, of robbers, and this bill is their payment for will enable him and his associates to make whichever you call them, who may be engaged that work. These convictions account for the millions, while the honest producer can justly I continuously in the public service; there is no earnestness with which I renew my protest | claim that we are unsettling the basis of his limitation of time, and their compensation may against its passage.

business without benefiting any one except || be anything which the Commissioner of Inter. I have other grave objections to this reduc- || those who have become conspicuous in their nal Revenue may choose to fix. If he chooses tion. The burdens of taxation should be borne opposition to the enforcement of the laws, and to pay them twenty dollars per diem the faith hy just such luxuries as whisky, wines, and their accomplices who occupy high positions of the Government is pledged to the approtobacco. I know that, under the incoming || in the Government.

priation of that money, or rather to its pay. Administration, this whisky tax can be and But my opposition to a reduction of the tax | ment, for I suppose general appropriations will be collected. If you reduce the tax on is intensified because of the improved ma- would cover this outlay of public funds. Let spirits now can you restore it a year hence? || chinery for the collection of whatever tax we me read this amendment in connection with No candid man will assert that an increase may decide upon, which this bill secures, We my remarks: can be passed after a surrender, which plainly are now collecting less than ten per cent. of the "That tho Commissioner of Internal Revenue admits our inability to enforce the payment whisky tax. I hope that this bill will secure,

shall have power, whenever in bis judgment the now. It is not statesmanship to tamper with even under the present order of things, not

necessities of the service may require, to employ

competent persons, not exceeding fity in number at Jaws to suit temporary emergencies; especially less than fifty per cent of this tax; and I am any one time, whose term of service shall continue Jaws which produce revenue should not be certain that under an honest administration we at the pleasure of the Commissioner of Internal hastily changed. They should never be touched shall be able to collect nearly all of it. As.

Revenue, who shall perform such duties and at such at the dictation of an admittedly corrupt com

places as may be required of them by the Commissuming this, how will we stand relatively ? sioner of Internal Revenue, at a rate of compensabination engaged in defying them.

With a tax of fifty cents we shall obtain tion to be determined by the said Commissioner before If the hope of increased revenue from this | $25,000,000 per year for the balance of this

the commencement of his employment." measure should be disappointed, if a less administration. After it passes away we shall, That is a very remarkable amendment, and amount shall be collected than at present, no doubt, succeed in collecting $40,000,000 as I understand this is to supply all the existwhich I fear, then must the inevitable deficit per annum, or just the amount we now presenting provisions which relate to the appointment be made good by the honest and now suffering to the whisky ring," in the vain hope of of agents of the Treasury Department in conindustries of the country. I, for one, will not | developing honesty in that batch of ruffians. nection with the internal revenue, and also for place these interests in danger of additional Now, let us calculate what would be the the appointment of district inspectors except burdens by relieving the most undeserving of result if we retain the two-dollar tax, and it as provided in other parts of this act. I am all our productions from its just share of the will appear that until the 4th of March next very reluctant to assent to anything so vague, expenses of the Government.

we may secure a revenue at the rate of indefinite, and in my judgment so liable to When the tax was fixed at two dollars per $100,000,000, and after that period $180,000,- | abuse as the new system of appointment of gallon an immense remission of taxes was made 000 a year, every cent of which will be so revenue persons, I suppose I may call them, in the interest ofthe whisky manufactures. All much taken off the better industries of the proposed in this amendment. As to the numwhisky in first hands was allowed to go free of country and placed on that one which ought || ber of them I have no means of information. tax, and this was the entering wedge to all the to pay the most heavily.

I am perfectly content to take the judgment corruption which has followed. How much we In every view of this case I hold it to be l of the committee as to that. were mistaken as to the determination to collect our duty to refuse to make the proposed reduc

The PRESIDING OFFICER. The questhis tax may be shown by a reference to the tion. Gentlemen favor this bill because I tion is on the amendment proposed by the Comdebates of the House of Representatives. If under the corrupt influences now at work the mittee on. Finance. my memory is not at fault, General Schenck, | "whisky ring'' are enabled to cheat the Govern.

The amendment was agreed to. the able chairman of the House Committee of ment out of vast sums, and with these sums Mr. FESSENDEN. There is another amend.

1

66

.

ment proposed to the thirteenth line of the l ter I received from West Virginia stating a very Mr. SHERMAN. I suggest that the bill be same section to insert the words and no dis- hard case, and I presume there are many cases reported to the Senate and then it can be done. triet inspectors." I move to amend that by of that kind in the southerns States, particu. Mr. POMEROY. It can be done now by striking out “and no district," and inserting larly where they do not know the trouble until general consent. "except inspectors ;'' and then after “inspect they come to use papers in court. In such The PRESIDING OFFICER. The amendors" insert the word "and."

cases, where there was no intention to defraud ment will be received if there be no objection. The PRESIDING OFFICER. The amend. the revenue, to impose the penalty of fifty dol- The question is on the amendment of the ment will be reported. lars would be very oppressive.

Senator from Vermont. The CHIEF CLERK. The Committee on The amendment was agreed to.

The amendment was agreed to. Finance propose after the word “revenue,'' in Mr. MORRILL, of Vermont. I desire to Mr. DAVIS. I desire to suggest an amend. line thirteen of section fifty, to insert the words

propose an amendment to section fifty-four, ment. I do not see the necessity or propriety " and no district inspector.'

pages 70 and 71. It will be noticed by Sena- of more than one mode of taxation of whisky. The Senator from Maine moves to amend tors that in the case of drawbacks the bill of The first section of the bill provides for a tax the amendment by striking out the words “and || lading is to be sent to the collector of customs of fifty cents upon each and every gallon. no district,” and inserting except;" and at the port of entry, and then another trans- There are other sections of the bill that impose after “inspectors" to insert "

and;'

80 as to mitted to the Commissioner of Internal Reve. a special tax, one a tax of four dollars for make the clause read:

nue. It is deemed to be better that this should every cask of forty gallons, “and the collector That from and after the passage of this act no be confined to the collector of the port of shall proceed to collect the same as in cases of general or special agent, by whatever name or des

entry and the returns made to the Secretary other assessments for deficiencies." These ignation he may be known, of the Treasury Departmentin connection with the internal revenue, except

of the Treasury instead of the Commissioner two classes of tax upon whisky and the differinspectors and except as provided for in this act, of Internal Revenue, and I am about to pro

ent modes of collection tend to complicate the shall be appointed, &c.

pose amendments to effect that object. In system. It seems to me that the more simple The amendment to the amendment was line five move to strike out the words " in the system can be of taxation upon whisky the adopted.

charge or exports” and insert " of customs." better for the tax-payer, and for the GovernThe amendment, as amended, was agreed to. Tben in line nine I move to strike out “ Com. | ment also. I think it would be much better Mr. FESSENDEN. Now, to carry that out,

missioner of Internal Revenue" and insert that there should be but one tax imposed upon it will be necessary not to agree with the com- "Secretary of the Treasury.!! In lines forty- || whisky. If the tax of fifty cents is not suffintittee in inserting the words “or inspectors” four and forty-five I move to strike out “sent cient for the purpose of revenue let the addi. on the next page.

to the collector of customs at said port of tional special tax of four dollars per barrel be Mr. SHERMAN. I have no disposition to entry and;" at the end of line forty-five, to comprehended in an increase of the tax of press this matter; but one great complaint | strike out “the other;" in line forty-six, to fifty cents. that has been made has been that an inspector strike out“ entry shall be ;and in line forty- I'here are some other objections to this spehas been appointed for almost every district in seven, to strike out “Commissioner of Inter- cial tax of four dollars a barrel. It will be the United States. How true that is I cannot nal Revenue" and insert " Secretary of the equivalent in large distilleries to a daily paytell. I have no doubt this will continue them | Treasury;' so as to make the clause read: ment of tax. That is what some gentlemen in office.

One bill of lading, duly signed by the master of the write to me who are engaged in the distillation Mr. FESSENDEN. They can be reduced

vessel, shall be deposited with the said collector, of whisky. I will read a paragraph from one

to be filed at his ollice with the entry retained by and will be unquestionably when you come to

of their letters: him ; one of said entries shall be, when the shipment appoint these other officers, but there are some is completed, transmitted with the duplicate of the

“You will observe that the tax as imposed by secdistricts where there must be inspectors where

bond to the Secretary of the Treasury, to be re- tions twelve and sixty-five on future distillation are corded, &c.

all collected monthly, which is equal to cash. A diswe cannot get along without them.

tiller making, say twenty-five barrels of whisky per The PRESIDING OFFICER. The amend. In line fifty I move to strike out the words

day, will have to pay, perhaps, not less than $120 per ment will be reported.

“in charge of exports" and insert in lieu day of taxes in cash. The Chief CLERK stated the amendment of

thereof the words of customs," and at the The tax being made payable monthly he the Committee on Finance to be to insert the end of that line and the beginning of the next

deems to be equivalent to a tax collectable each to strike out the words “the internal revenue' words " or inspectors'' after “ agents,” in line

day. I suppose there is very little difference. sixteen of section fifty. and insert a customs;' so as to read :

A man engaged in distilling whisky making The amendment was rejected. order or permit signed by the collector of cus

that quantity will have to keep his deposits in toms and directed to a customs gauger,' Mr. FESSENDEN. I move the following | instead of an internal revenue gauger.

bank from which to pay this tax monthly; and

it would make very little difference to him as an additional section to come in at the end The PRESIDING OFFICER. These amend

whether he paid it daily or monthly. But it of the bill: ments are to a section which has been inserted.

seems to me that a system of taxation cannot And beit further enacted, That the penalty provided Mr. MORRILL, of Vermont. I propose to be too simple. In proportion as you simplify by law for issuing any instrument, document, writ- include all my propositions in one amendment | it you make it acceptable to the people who ing, or paper without being duly stamped, may be remitted by the collector in the manner and cases

after I have read all I propose. On page bave to pay the tax; you make it easily comspecified in section nine of the act approved July 13, seventy-two, line fifty-five, I move to strike out prehensible by them, and by the officers who 1866, entitled "An act to reduce internal taxation to "internal revenue" before the word “gauger;": amend an act entitled 'An act to provide internal

are to collect the tax. Certainly there is much revenue to support the Government, to pay interest

and at the end of the line and beginning of greater liability to misunderstandings and to on the public debt, and for other purposes,' approved the line fifty-six to strike out the words in June 30, 1864, and acts amendatory thereof," at any

vexatious delays and impediments under this timo prior to the 1st day of January, in the year charge of exports ;'' and then, at the end of

double system of taxing whisky than there 1869, or at any time within one year after the making line fisty-six, and beginning of the next line, to would be upon a simple principle of taxing it and issuing thereof. strike out the words“ Commissioner of Inter

so much per gallon. I can explain this in a word if it needs any nal Revenue" and insert “Secretary of the I think that the honorable chairman of the explanation. The chairman understands it. Treasury;' and in line fifty-eight to strike out

Committee on Finance could, without any Section nine of the act referred to provides for “in charge of export;" so that the clause will sacrifice of the interests of the public Treasury, remedying the difficulties occasioned by the read:

include both systems in one simple mode of want of a stamp. The provision is substantially The casks or packages shall be inspected and taxation. Let the amount that shall be col: that wherever à stamp has been omitted, it may

gauged alongsido of or on the vessel by the gauger
designated by said collector, under such rules and

lected upou whisky, the total aggregate amount, in certain cases and in a certain way be put on regulations as the Secretary of the Treasury may be payable by a simple tax of so much per afterward on paying the proper sum and pay. prescribe, &c.

gallon. ing the penalty affixed of fifty dollars. Then Now, Mr. President, in order to effect all There is another objection to the special tax. there is an additional provision that that pen. these changes I move to substitute the section That is payable before the whisky is sold. It alty in different cases where the collector is as amended as I propose for the present sec- is payable monthly; it is payable, therefore, as satisfied that the stamp was omitted by acci- tion fifty-four. The effect is to place this mat- a general rule, before the sale of the whisky. dent or misunderstanding, without any inten. ter in charge of the collector of the port of || Large operators will have to advance a contion to deter the Government, may be remitted, entry and the Secretary of the Treasury instead siderable sum in the way of this special tax also. The provision is that it may be remitted of the officers of internal revenue and the before they can have the opportunity of selling at any time before the month of August of that Commissioner of Internal Revenue.

their whisky and obtaining the money to pay year, or at any time within one year after the Mr. POMEROY. The several amendments the tax by the sale of the article. I think, date of the instrument, application being made produce that effect?

and would respectfully suggest to the honorfor the purpose.

This amendment merely Mr. MORRILL, of Vermont. Yes, sir; and || able chairman, that the system might be simprovides that the time within which the penalty || I move it all in one amendment now. I move || plified and improved both in relation to the may be remitted may be continued up to the to substitute the section, as amended, for the complexity that the two modes of taxation 1st day of January next.

section as it stands in the bill.

produce and the time of payment of the tax. We have to pass these acts every once in a Mr. SHERMAN. It is right. The Com- I merely throw it out as a suggestion. while in order to prevent a good deal of evil missioner of Internal Revenue requests that Mr. SHERMAN. I do not wish to discuss to the community.

the amendment be made.

this question, because I hope we shall be able It is merely continuing the time within which The PRESIDING OFFICER. The amend- to get the bill reported to the Senate before the collector, in old cases, where they come ment of the Senator from Vermont proposing five o'clock, and avoid an evening session. to the knowledge of persons may remit the pen- to modify what has been already amended is. I desire to say that the Committee on Finance alty. My attention has been called to it by a let- not strictly in order.

considered itself concluded apon the amount

an

"

а

of tax to be levied upon whisky; not so pre- the tax of fifty cents per gallon, though I say this presumption that is now before us that the cluded but that we could propose amendments ; distinctly that I have no more faith in collect- machinery about to be provided if this bill but the discussion in the other House, and the ing fifty cents on the gallon than I have in col- passes will be more efficient to collect the tax, general concurrence of sentiment throughout lecting two dollars.

we ought not certainly at the same time that the country in a measure precluded us from Mr. SHERMAN. If my friend will allow we provide this machinery reduce the tax from opening the question as to the rate of tax upon me, as I find there is a general disposition in two dollars down to half a dollar. I bave whisky. I regret myself exceedingly to sur- the Sunate to avoid a recess to-night and to sit thought all along since this matter has been render the large tax now imposed upon whisky. a little longer and try to finish this bill, I de- discussed that we might reduce it from two I thought at the time it was adopted that it sire to submit a motion

dollars to one dollar, but to reduce it to one was too high. I believed then that a dollar a Mr. POMEROY. I am not going to take quarter what it was, and to do that in fear that gallon could be collected, and I still think that two minutes.

we shall be unable to collect the tax because a dollar a gallon might be collected. But the Mr. SHERMAN. I move that the recess it is large is a confession which I think we general feeling in the country has been one of for to-day be dispensed with, so that we may ought not to make, and for one I am quite disgust at the failure to collect the whisky tax. proceed along until we finish the bill. It will unwilling to make it. The manifest frauds throughout the land, the not take long

Mr. VAN WINKLE. Is it in order to offer gross and immoral practices that have grown Mr. BUCKALEW. I suppose the Senator an amendment now? out of it, have convinced men of the necessity means only to go on until the bill shall be The PRESIDENT pro tempore. An amendof breaking them up even at the surrender of reported to the Senate.

ment is in order. the tax, and I think the general judgment of Mr. SHERMAN. No; I think we can pass Mr. VAN WINKLE. I offer the following the moral men of the country is that it is better it pretty soon. I move to dispense with the amendinent, to come in as an additional secto surrender this whole tax and all the revenue recess for to-day.

tion: to be derived from whisky rather than to con- The motion was agreed to.

And be it further enacteil, That so much of all acts tinue a rate of tax that is entirely for the

and parts of acts as impose any internal revenue tax

Mr. POMEROY. I was only going to ob- on illuminating or other mincral oils, and on the benefit of what is called the whisky ring. It serve that when there has been an organized product of the distillation, redistillation, or refining of is a general satisfaction to the people through- || system in the country of defrauding the Gov.

crudo petroleum, or of crude oil produced by a single out the country that this enormous profit, which

distillation of coal, shalo, peat, asphaltum, or other ernment that organization will exist, and when bituminous substances, together with all provisions went to the worst men in the country, should be they cannot defraud it in dollars they will de. relating to returns, assessments, warchousing, and broken up even at the sacrifice of a consider- fraud it in dimes, and they will keep it up. If

bonding, and all other provisions for determining the able amount of revenue. At any rate, the

quantity of mineral oil distilled for the purpose of we all stampede before the whisky ring, and socuring the payment of the tax thereon, be, and the committee did not choose to open the question, give it possession, I have no more faith that we same are hereby, repealed; and no tax imposed by although any Senator is at liberty to do so. shall collect the revenue at fifty cents than that

existing laws on such oils or products in the bands of We reported the fifty-cent rate because we

the producer or manufacturer, or bis agent or agents, we could do it at two dollars. The machinery

at the passage of this act and unsold, shall be colfound it in the bill.

of this bill, I think, has been well drawn and lected. In regard to the double tax referred to by || carefully guarded, and I do not know that it Mr. President, when a similar bill was before the Senator from Kentucky, I will say that in can be improved upon; but for the Congress of the Senate in the spring I proposed a reduction the first place I thought the whole tax might || the United States and the American people to of this tax of one half, and at that time gave properly be levied on spirits when sold, but I come down to say that we cannot collect a rea- many, as I think, good reasons for it. At any am now satisfied that it is better to divide the

sonable tax, a tax that other Governments can rate, the proposition was carried through both tax. This limitation prevents small distilleries collect, not more honest than ours or more Houses. I presume it may be said that I ought from running to advantage. The minimum efficient, to say that there is a ring which beats to have asked for the whole then. There were tax is levied on distilleries producing a hun- the Government and beats the revenue officers, reasons then assigned which it may not be dred barrels or less. Consequently the small || and that we will retire from the field and say necessary to repeat now except very briefly. I distilleries that produce twenty or thirty or that they may have their own way, and that we will only say that notwithstanding the reducforty barrels are at a disadvantage. It is to will only take fifty cents on the gallon, is not tion of one half the tax, it is still an extraordithe interest of the Government to break thein

only, as the Senator from Pennsylvania [Mr. | narily high tax. It amounts to about one up, because the amount of revenue derived from these small distilleries does not pay for

CAMERON) said, humiliating, but I do not be- hundred per cent. on the crude material out

lieve in the policy of it, and we shall not get of which this oil is manufactured. It is made the gauger and proper officers to take charge the revenue by it. I will content myself by an exception to all other manufactures of its of them. The tendency of the special tax we voting against it.

class in this : that a tax for any amount whatimpose is to break up the small distilleries and Mr. COLE. Mr. President, I cannot bring ever is continued upon it. Now, when a dispoconfine the business to distilleries of a larger | myself to the point of acquiescing in a reduc- sition has been manifested in both Houses of size.

tion of the tax on whisky from two dollars to Congress to relieve our manufactures from I tried last night to get the Senate to raise | fifty cents a gallon. It seems to me that it taxation as far as possible, I do not think there the minimum. Instead of a hundred barrels

will be an acknowledgment exceedingly humil. || is any good reason why this article should be I would make it five hundred, and that would iating to us as a nation. I believe the ma. singled out to bear a tax when others are let go. have a more beneficial effect, by stopping the chinery which is provided by this new bill that This provision, I think, is germane to this distillation of spirits at the small stills, where

we are about to act upon is very complete ; || bill, because petroleum and its products conit cannot be properly watched. This arrange- every exertion, at all events, has been made stitute one of the three articles which are sub. ment divides up the tax, and they payit monthly. in committee to make it perfect; and if it is ject to this host of inspectors and gaugers, and It is put on in such a way that it is almost sufficient to collect fifty cen's tax on whisky I I do not know what all, in order to collect the impossible to defraud the revenue. Most of

am quite satisfied that it will be sufficient to tax on that which is consumed at home. It is the distillers prefer this division of the tax. collect a larger tax. If it is not sufficient to loading an article of general use, an article of Besides, by it the Government gets a uniform collect two dollars tax we had better leave the necessity, an article which now enters into the revenue, while by the other system the whisky machinery as it is. I do not see that we are consumption of almost every family in the land may remain in store twelve months without going to add to the revenue by dropping down out of the cities where gas is used, and cven the Government getting any tax, and in the from two dollars tax to fifty cents tax, with, at there, with unnecessary trouble and burdens, mean time the Government lose by the wast- at the same time, a confession that our ma- and thereby is interfering greatly with the age, the stealing and the fraud that may occur chinery is imperfect. The “whisky ring," if business in store during these twelve months. Under there be such a concern, and nobody can questhis system we at least get the tax upon the tion its existence, will cheat as readily for the and one upon which I rely most in asking the product as it is distilled paid monthly, assessed

purpose of avoiding the tax of fifty cents as favor of the Senate for this amendment. Within by the gauger, and ascertained by the store

they will for the sake of avoiding a tax at a a very few years this article of petroleum in its keepe: It is no inconvenience, but rather, I larger rate.

manufactured state, and also in its crude state think, a matter of convenience to the distiller, The tax upon whisky collected in Great to a less extent, has become an article of exbecause the monthly payments break up the | Britain, as I am told and believe it to be the port; so that the amount now exported from amount of his tax, and there is no difficulty in || fact, is $2 50 a gallon-ten shillings a gallon. ascertaining it, because the same machinery | They are able to collect it very closely. They

this country annually is about thirty million

dollars. There is hardly any other article I prewhich ascertains the producing capacity also are able to collect, I believe, about all of that sume at this time, to the amount to which it is ascertains the amount that is to be taxed when description of tax. We, it seems, are not so it is taken out of store. I will not debate it

exported, that is as valuable; and certainly it successful. But the presumption is, or ought cannot be denied by anybody, and it will not be longer.

to be, that we are improving our machinery, Mr. POMEROY. I am not going to occupy

doubted by anybody, it will not be pretended that we are getting it so nearly perfected that even; that it is not the true interest of this the time of the Senate, but I wish to say that we can collect more and more of the tax. The country to encourage every article of export if the Senator from Ohio expects that reducing machinery, no doubt, has been imperfect from that we can produce. It saves the specie from this tax to fifty cents is going to make every: the start so as to admit of many frauds; but | being drained from the country; it tends to pay body honest, and that he will collect it, he will it takes some time to perfect any description off our foreign debt of whatever nature ; and of be, I think, mistaken. I read the debate in of machinery. Senators need not be reminded course recommends itself, therefore, rather as the other House, and I was sorry to see that that the steam engine was many years in be. a thing to be encouraged than a thing to be our friends had all stampeded before the whisky || coming perfected; and the means by which depressed. ring. So I suppose it will be unavailable to any particular description of tax is to be col- Now, sir, what is the consequence of the try to make any effort here not to concur in lected cannot be made perfect at once. With tax? This oil that is exported, it is true, is

des But, Mr. President, there is another reason,