who raises tobacco. We may say he sells his land, because if he continues to cultivate tobacco on the same land from year to year in four years the land is worthless unless it is recuperated by putting on an amount of manure that would be equal to the value of the land. Take the case of timber. If a man sells timber from his land he often sells off all the value there is in the land. Now, if we go into this question we shall be compelled to go much further than the gentleman proposes. Therefore I think we had better not adopt it.

The amendment was not agreed to.

Mr. DAVIS. I move to add at the end of the paragraph this additional proviso:

And provided further, That any gains and profits of any company, association, or partnership which shall be returned and the tax thereon paid before the same shall be divided, shall to the amount on which such tax has been paid be exempt from tax when afterwards divided.

I was told that that provision was already made in the bill. I find that the provision alluded to does not cover the point I had in mind at all. The provision in the bill is this:

And the share of any person of the gains and profits of all companies, whether incorporated or partnership, who would be entitled to the same, if divided, whether divided or otherwise, except the amount of income received from institutions or corporations, whose officers, as required by law, withhold a per cent. of the dividends made by such institutions, and pay the same to the Commissioner of Internal Revenue or other officer authorized to receive the

same.

There are many cases where the corporation cannot divide it up. But by this provision the individual stockholder is required to return the undivided profits of the company or association, and when he returns that it is considered as a part of his income and taxed, and afterward when the company or association makes the dividend the company or association must pay the tax. Now, if we would do justice and prevent the payment of the tax twice over, it seems to me the amendment I have offered should be adopted.

Mr. HOOPER, of Massachusetts. If I understand the amendment of the gentleman from New York [Mr. DAVIS] I can see no necessity for it. No corporation makes a return; only persons are called upon to make returns. think his amendment would only obstruct the operation of the law, and I hope it will not be adopted.

I

The amendment of Mr. DAVIS was rejected. Mr. MORRILL. I move to insert a provision that was omitted by mistake. It is the provision of the present law, with the change to $1,000 from $600. I move to add to the paragraph the following:

And provided further, That in cases where the salary or other compensation paid to any person in the employment or service of the United States shall not exceed the rate of $1,000 per annum, or shall be by fees, or uncertain or irregular in the amount or the time during which the same shall have accrued or been earned, such salary or other compensation shall be included in estimating the annual gains, profits, or income of the person to whom the same shall have been paid, in such manner as the Commissioner of Internal Revenue, under the direction of the Secretary of the Treasury, may prescribe.

The amendment was agreed to.
The Clerk read as follows:

That section one hundred and eighteen be amended by striking out all after the enacting clause and inserting in lieu thereof the following: that it shall be the duty of all persons of lawful age to make and render a list or return, in such form and manner as may be prescribed by the Commissioner of Internal Revenue, to the assistant assessor of the district in which they reside, of the amount of their income, gains, and profits, as aforesaid; and all guardians and trustees, or any person acting in any other fiduciary capacity, shall make and render a list or return, as aforesaid, to the assistant assessor of the district in which such guardian or trustee resides, of the amount of income, gains, and profits of any minor or person for whom they act as guardian or trustee; and the assistant assessor shall require every list or return to be verified by the oath or affirmation of the party rendering it, and may increase the amount of any list or return, if he has reason to believe that the same is understated; and in case any person, guardian, or trustee shall neglect or refuse to make and render such list or return, or shall render a false or fraudulent list or return, it shall be the duty of the assessor or the assistant assessor to make such list, according to the best information he can obtain, by the examination of such person, and his books and accounts, or any other evidence, and to add fifty per cent. as a penalty to the amount of the duty due

on such list in all cases of willful neglect or refusal to make and render a list or return, and in all cases of a false or fraudulent list or return having been rendered, to add one hundred per cent. as a penalty, to the amount of duty ascertained to be due, the duty and the additions thereto as penalty to be assessed and collected in the manner provided for in other cases of willful neglect or refusal to render a list or return, or of rendering a false and fraudulent return: Provided, That any party, in his or her own behalf, or as guardian or trustee, shall be permitted to declare, under oath or affirmation, the form and manner of which shall be prescribed by the Commissioner of Internal Revenue, that he or she, or his or her ward or beneficiary, was not possessed of an income of $1,000, liable to be assessed according to the provisions of this act; or may declare that he or she has been assessed and paid an income duty elsewhere in the same year, under authority of the United States, upon his or her income, gains, and profits, as prescribed by law; and if the assistant assessor shall be satisfied of the truth of the declaration, shall thereupon be exempt from income duty in said district; or if the list or return of any party shall have been increased by the. assistant assessor, such party may exhibit his books and accounts, and be permitted to prove and declare, under oath or affirmation, the amount of annual income liable to be assessed; but such oaths and evidence shall not be considered as conclusive of the facts, and no deductions claimed in such cases shall be made or allowed until approved by the assistant assessor. Any person feeling ag grieved by the decision of the assistant assessor in such cases may appeal to the assessor of the district, and his decision thereon, unless reversed by the Commissioner of Internal Revenue, shall be final, and the form, time, and manner of proceedings shall be subject to rules and regulations to be prescribed by the Commissioner of Internal Revenue.

Mr. HALE. I move to amend the paragraph by inserting after the words "and in neglect or refuse to make and render such list case any person, guardian, or trustee shall

or return, or shall render a false or fraudulent list or return, it shall be the duty of the assessor or the assistant assessor, "the following:

After notice to the party so neglecting or refusing, or making or rendering such false or fraudulent return, and after a reasonable hearing being afforded to such party.

The hour of half past four o'clock having arrived, the Speaker resumed the chair, and the House took a recess until half past seven o'clock p. m.

EVENING SESSION. The House reassembled at half past seven o'clock p. m.

TAX BILL.

Mr. GARFIELD 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 upon the amendment of Mr. HALE, to insert after the words "and in case any person, guardian, or trustee shall neglect or refuse to make and render such list or return, or shall render a false or

fraudulent list or return, it shall be the duty

of the assessor or assistant assessor," the following:

After notice to the party so neglecting or refusing, or making or rendering such false or fraudulent return, and after a reasonable hearing being afforded to such party.

Mr. HALE. I do not propose to urge a vote to-night upon the amendment which I have proposed, after conversation with some of the members of the Committee of Ways and Means; but I wish to call the attention of the committee very briefly to what strikes me as a palpable defect of this paragraph, which ought to be remedied, and toward which the amendment I proposed was directed. When I proposed this amendment I did not consider it sufficient to cover the whole case. I offered it merely as pointing in that direction, and with a view of putting it into a proper form hereafter. This paragraph as it now stands corresponds in many respects with the provis

ions of a previous section of the act which I understand has been considered in Committee of the Whole at a time when I was not present, but which I understand has been reserved for future consideration.

In both these sections-the fourteenth and the one now under consideration-very vague, general, and loose language is used, which is upon its face susceptible of what strikes me at least as very dangerous constructions. This paragraph provides that an assistant assessor may increase the amount of a list or return, if he has reason to believe that the amount is understated. It provides that in case of refusal to make a return he may prepare a return according to the best information he can obtain. It provides that, if he shall come to the conclusion that a party has rendered a false or fraudulent list or return, he shall have power to make a new return for the party. It does not provide in terms that he shall give any notice or hearing to the party interested in either of these cases; but it does provide that he may go on and impose a penalty, in the one instance of fifty per cent., and in the other of one hundred per cent. It has come within my personal knowledge that it has been assumed by assistant assessors that they have power on ex parte evidence, without any hearing of the party, to make up a corrected return in lieu of what they have been pleased to consider a false and fraudulent return, and to impose a penalty for such false and fraudulent return.

The CHAIRMAN. The gentleman's time has expired.

Mr. HALE. For the purpose of concluding what I desire to say, I move to amend the amendment by striking out the last word. Now, sir, I do not believe that such a construetion of this paragraph was contemplated by the framers of the law. I doubt if that be the fair construction of the paragraph as it stands. If that be the proper construction of the paragraph, I certainly have no doubt that it is in violation of every principle of law, and it is, I believe, an unconstitutional provision. Itherefore wish that this section and the fourteenth section, both upon the same general subject, and both seeking to attain the same general end, shall be so modified as to provide for a proper hearing, and a proper examination, both in the case where a person neglects to make a return, and where a person is charged with making a false return, and that in the latter case the question may be brought before a competent tribunal which shall have power, according to the Constitution, and according to settled principles of law, to impose the penalty which the law seeks to impose.

In conformity, therefore, to the suggestions which have been made by other members of the Committee of the Whole, including some I will, if it be acceptable to the committee, members of the Committee of Ways and Means, withdraw my amendment, with the understanding that this paragraph shall pass over for further consideration in connection with the fourteenth section, which has already been passed. I trust that a carefully prepared and proper graph and for that, so that the objections which substitute may be found both for this paraI have pointed out may be obviated.

The CHAIRMAN. Is there any objection to the understanding that this paragraph shall be reserved for action hereafter?

Mr. ALLISON. I will not object, if it be understood that it shall be open to amendment with reference only to the points presented by the gentleman from New York, [Mr. HALE.]

Mr. HALE. I desire that it should be amended purely with reference to the machin ery of the act-the manner of making returns and imposing penalties.

The CHAIRMAN. If there be no objection, such will be the understanding. There was no objection.

The Clerk read as follows:

That section one hundred and nineteen be amended by striking out all after the enacting clause and inserting in lieu thereof the following: that the duties on incomes herein imposed shall be levied on the 1st day of May, and be due and payable on or before the

30th day of June, in each year, until and including the year 1870, and no longer; and to any sum or sums annually due and unpaid after the 30th of June, as aforesaid, and for ten days after notice and demand thereof by the collector, there shall be levied in addition thereto the sum of ten per cent. on the amount of duties unpaid, as a penalty, except from the estates of deceased and insolvent persons.

Mr. GARFIELD. With the consent of the committee, I desire to offer an amendment to the previous paragraph.

The CHAIRMAN. The Chair hears no objection.

Mr. GARFIELD. I move to amend, by inserting at the end of line twenty-five hundred and ninety-six the following:

Provided further, That the list of incomes in the office of the assessor and collector shall be open to the inspection of the public; but neither the assessor nor collector shall furnish such list or any portion thereof for publication, nor permit the same to be copied for publication.

Mr. Chairman, one feature of the internal revenue law which has made it very odious indeed in many parts of the country, and perhaps justly so, is that provision under which the business of every man has been dragged into public view through the newspapers. This has very much disturbed the relations of business men toward each other. It has subjected men's affairs to what no man would willingly consent to. We all know that the reason why in the present law facilities were afforded for the publication of these lists was the apprehension that there might otherwise be in many cases a failure to make the proper return of income. But, sir, it is believed that the same object can be secured by providing that these lists shall be open to the inspection of the public, so that any man who desires to ascertain what income return his neighbor has made can have access to the list, but that the list shall not be furnished systematically for publication, and be paraded in the press simply to gratify public curiosity.

Mr. PRICE. Mr. Chairman, I am inclined to the opinion that the amendment ought not to pass, and for the very good reason that in my mind the publication of the amount given in by persons upon which they pay income tax has been increased from the fact that they knew it would be published. If a man makes a fair and honest return he has no objection to its being made known. If he does not make a fair and honest return then everybody ought to know it. It is different in allowing it to be published in the newspapers and in allowing men to go and see it. Not one man in five hundred will go into the office to see what the returns are. It will be poking his nose into every man's business. If it is in the newspapers every man will see it. Men will put in a larger income if they know it is to be published in the newspapers. An honest man has no objection to the world seeing what he does. A dishonest man may not want his return to be made public.

Mr. GARFIELD. I move to strike out the last word.

Mr. Chairman, the gentleman from Iowa is mistaken when he says an honest man has no objection to the public understanding about his private affairs. Suppose a man has had serious losses during the year, so that his income would be smaller than people expect it to be. Now, he would not want to let that be known so as to alarm his creditors and bring them all down upon him when otherwise he would come out safely. There is no reason in the world, unless the public interests require, that the private affairs of individuals should be brought out and paraded in the public papers. I admit that some sort of publicity is necessary to act as a pressure upon men to bring out their full incomes, but if the lists are left open for public inspection it will be an ample pressure upon them. I do not agree with the gentleman from Iowa that not one in five hundred would go to look at the lists. I know they do go now. If a man comes up to the county seat he is sure to inquire what is the income of his neighbors. I am satisfied it is all the publicity necessary to

effect the purpose without having the offensive feature. I am desirous of making the laws as efficient as possible without making them odi

ous.

I believe the feature I am now discuss. ing is unnecessarily odious. I think my amendment will take away that odious feature. I withdraw the amendment to the amendment.

Mr. HALE. I move to strike out the last word, simply to say in response to the gentleman from Iowa, [Mr. PRICE,] who thinks no honest man can have any objection to his affairs being published to the world, it strikes me there are two classes of honest men who may have objection to the publication in the newspapers of their incomes: the one class being those who have large incomes and the other those who have not. [Laughter.]

Mr. PRICE. I trust the committee will observe the argument used for the purpose of keeping this information out of the papers. The first class, those who have large incomes, the gentleman says will object to have them published in the papers. He does not say why they will object. We have only his ipse dixit. He says the other class who have small incomes will object to it; he does not tell us why. It is a matter of opinion.

return which the wealthy man makes, so that the poor man shall not see it, though the burden will fall upon him if the rich man does not pay his full share, then let him say so. But if he is willing that the public, if they go to the trouble to have it copied, shall have this record published, then I hope he will accept my amendment to his amendment, as it will still leave all of his amendment that is valuable, and will give the public an opportunity to know what is going on.

Mr. MORRILL. There are just two poli cies to be adopted in this matter: one is to provide that these lists shall not be published in the newspapers; the other is to allow them to be so published. If the amendment of the gentleman from Pennsylvania [Mr. SCOFIELD] prevails, of course these lists are to be published as they have been hitherto. I think there have been few instances, when they have been heretofore published, that the collector or the assessor has been at the trouble and labor of furnishing a copy of the list. But the officer has permitted the newspaper reporter to take a copy. I must say that I feel somewhat indifferent in regard to this subject. But the argument upon the question has not been fully stated. There is no question that the publication of these lists has a tendency to increase the revenue. But is is an inconvenience, and causes a great deal of complaint, not only among the wealthy, but among those who have moderate incomes. If a man has been doing a disastrous business, either in a mercantile or a manufacturing line of business, he does not quite like to have the fact immediately published to the world. If, on the contrary, he has been doing a very prosperous business, he does not like to have that fact

Mr. HALE, by unanimous consent, withdrew his amendment to the amendment.

Mr. SCOFIELD. I move to strike out the words "nor permit the same to be copied for publication," so that the amendment shall simply provide that the officer shall not furnish lists for publication. I would be glad if the gentleman from Ohio [Mr. GARFIELD] would accept that amendment. It seems that there is nobody on the other side to-night to raise the constitutional question. When anything good is to be done, or anything bad is to be stopped, we always hear from the other side that it is not constitutional. And I had looked for some gentleman over there to raise that question in regard to the amendment offered by the gentleman from Ohio, to say that all the proceedings of this Government, except the secret sessions of the Senate, are public. The newspapers of the country are the eyes of the country. And if the editors and their correspondents are to be denied access to these records for the purpose of giving them publicity the public can have no real information upon the subject.

Take a district like the one I have the honor to represent, two hundred miles in length, with the office of the assessor at one end of the district and the office of the collector at the other. How are the people to know who of their neighbors are returning proper incomes, when their returns have been given in and sent off one hundred and fifty or two hundred miles? Are they all to go that distance and examine the records, for the purpose of ascertaining whether their neighbors are cheating the Government and compelling them to pay too much? Or are their neighbors who wish to guard them in the same respect to travel two hundred miles to look over the records? Let the editor who resides in the town where the assessor has his office, send his clerk if he chooses or go himself and copy from the records. That I think is constitutional; it is free speech and nothing else.

Now, if the gentleman from Ohio [Mr. GARFIELD] wants to place a padlock on the records, I warrant you that every wealthy man in the House will vote with him on this subject. If the gentleman wants to put a padlock on the

competition.

Now, if we are to have any change at all, it should go at least as far as the amendment proposed by the gentleman from Ohio, [Mr. GARFIELD.] If we are to have no change, then we can vote down the amendment of the gentleman from Ohio or adopt the amendment proposed to that amendment by the gentleman from Pennsylvania, [Mr. ScoFIELD.]

The question was upon the amendment to the amendment, to strike out the words "nor permit the same to be copied for publication."

The amendment to the amendment was not agreed to.

The question recurred on Mr. GARFIELD'S amendment.

Mr. SPALDING. Is it in order to move to amend the amendment by striking out "neither" and "nor" and inserting "either" and "or" in lieu thereof?

The CHAIRMAN. It is.

Mr. SPALDING. Then I make that motion.

The amendment to the amendment was not agreed to.

Mr. SLOAN. I move to amend by inserting the words "but shall not prevent the same from being copied for publication."

The question was put; and there were-ayes 30, noes 45; no quorum voting.

Mr. SLOAN. I withdraw the amendment to the amendment.

The question recurred on Mr. GARFIELD'S amendment.

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

The committee divided; and the tellers reported-ayes fifty-six, noes not counted. So the amendment was agreed to. Mr. BERGEN. I move to insert at the end of the paragraph the following:

No passport shall be issued from the State Department, or by any minister, chargé, or consul, to any person unless he produces the receipt or other sufficient proof thereof for the payment of all income taxes imposed upon him from 1862 to the date of his application. Nor shall any passport be renewed or viséed by any minister, chargé, or consul abroad, unless the same condition be complied with.

Mr. MORRILL. I make the point of order that that amendment has once been offered and voted down.

Mr. BERGEN. Not as an amendment to this section.

Mr. MORRILL. I would say to the gentleman that his amendment is entirely impracti cable, because one half of the people do not have any income at all.

The CHAIRMAN. The Chair overrules the point of order. The amendment is now offered to another section of the bill.

Mr. BERGEN. The object of this section is to catch dodgers. [Laughter.] I hold that every American citizen ought to pay his fair share toward the support of the Government. Now, many go to Europe and remain there to evade paying their share of the expenses of the Government. They claim the protection of the Government while they are there. When they are compelled to travel from place to place they call upon our ministers and other agents for passports. They then ask the assistance of our Government. The only way that I can see in which we can catch these parties and make them pay their share of our taxation is to refuse them passports until they have paid their share of our taxes. If my amendment would not reach such parties, I hope some member of the committee who is more conversant with the matter than I am will so amend it as to put the matter in such condition that they will be reached.

Mr. MORRILL. I hardly think that we should gather any very great increase of revenue from the provision of the gentleman if it should be adopted, and I think it is wholly impracticable. A passport is not so essential in visiting foreign countries that every person needs one. I do not think that one half of the persons going abroad stop to think of the necessity of taking a passport; and it will be noticed that this amendment applies to every one. Whether the party pays an income tax or not, he must show a receipt that he has paid one every year for the past four years. Mr. BERGEN. I call for tellers on my amendment.

Tellers were not ordered.

The amendment was disagreed to.

Mr. MORRILL. On page 114, in line twentysix hundred and eight, I move to strike out the word "and" and insert "or" in lieu thereof; so that it will read:

And to any sum or sums annually due and unpaid after the 30th of June, as aforesaid, and for ten days after notice and demand thereof by the collector, there shall be levied in addition thereto the sum of ten per cent. on the amount of duties unpaid, as a penalty, except from the estates of deceased or insolvent persons.

The amendment was agreed to.

The Clerk read as follows:

That section one hundred and twenty be amended by striking out the proviso to said section and inserting in lieu thereof the following: Provided, That the tax or duty upon the dividends of life insurance companies shall not be deemed due until such dividends are payable; nor shall the portion of premiums returned by mutual life insurance companies to their policy holders, nor the annual or semi-annual interest allowed or paid to the depositors in savings banks be considered as dividends.

That section one hundred and twenty-three be amended by striking out all after the enacting clause and inserting in lieu thereof the following: that there shall be levied, collected, and paid on all salaries of officers, or payments for services to persons in the civil, military, naval, or other employment or service of the United States, including Senators and Representatives and Delegates in Congress, when exceeding the rate of $1,000 per annum, a duty of five per cent, on the excess above the said $1,000; and it shall be the duty of all paymasters and all disbursing officers under the Government of the United States, or in the employ thereof, when making any payments to officers and persons as aforesaid, or upon settling and adjusting the accounts of such officers and persons, to deduct and withhold the aforesaid duty of five per cent., and shall, at the same time, make a certificate stating the name of the officer or person from whom such deduction was made, and the amount thereof, which shall be transmitted to the office of the Commissioner of Internal Revenue, and entered as part of the internal duties; and the pay-roll, receipts, or account of officers or persons paying such duty as aforesaid, shall be made to exhibit the fact of such payment. And it shall be the duty of the several Auditors of the Treasury Department, when auditing the accounts of any paymaster or disbursing officer, or any officer withholding his salary from moneys received by him, or when settling or adjusting the accounts of any such officer, to require evidence that the duties or taxes mentioned in this section have been deducted and paid over to

the Commissioner of Internal Revenue: Provided, That payments of prize money shall be regarded as income from salaries, and the duty thereon shall be adjusted and collected in like manner.

Mr. MORRILL. On page 115, in line twentysix hundred and thirty-one, I move to strike out the word "and" and insert in lieu thereof the word "or."

The amendment was agreed to.

Mr. MORRILL. In line twenty-six hundred and thirty-two, I move to strike out the word "and" before "persons" and to insert "or."

The amendment was agreed to.

Mr. MORRILL. In line twenty-six hundred and thirty-four, after the word "and" I move to insert the word "they."

The amendment was agreed to.

Mr. MORRILL. At the end of the para

graph I move to add the following additional proviso:

Provided further, That this section shall not apply to payments made to mechanics and laborers employed upon the public works.

The amendment was agreed to.

Mr. GARFIELD. In line twenty six hundred and forty-eight I move to insert after the word "revenue" the words " or other officer authorized to receive the same." 29

The amendment was agreed to.

Mr. ANCONA. I move to amend the paragraph by striking out all after the word "clause" in line twenty-six hundred and twenty down to the end of the paragraph.. The effect of the amendment would be to so amend the law as it now stands as to strike out the section that requires the tax to be deducted from the pay of officers in the employment of the Government and give them the privilege of making the deductions that persons not in the employ of the Government are entitled to. I cannot see the propriety of making a discrimination against persons in the employ of the Govern

ment.

Mr. MORRILL. I am delighted to see the gentleman from Pennsylvania showing such a kindly disposition toward office-holders, but I trust we shall not adopt his motion. There is, perhaps, no class better able to pay this tax than the office-holders of the country. Until there is less ambition to accept of public station, with all the duties and costs of office, I think we may very well retain this tax.

The amendment was disagreed to. Mr. WILSON, of Iowa. I wish to call the attention of the committee to an amendment which I think should be made in the paragraph which we have just passed. On page 107 an amendment was made to insert the words "or savings" after "provident.'

The CHAIRMAN. That amendment was rejected.

Mr. WILSON, of Iowa. I understood that it was adopted.

The CHAIRMAN. The Chair is informed that it was not.

Mr. MORRILL. With a view to make the provisions identical, I move to insert in line twenty-six hundred and seventeen, after the word "in," the words "provident institutions

Or."

Mr. THAYER. I ask the gentleman to insert the words "savings institutions" also. Mr. MORRILL. That amendment was rejected when the other section was under consideration, and I must object to it.

Mr. THAYER. I would inquire if the amendment was not adopted on page 107. The Clerk states that according to his recollection it was adopted.

The CHAIRMAN. The Clerks state that the amendment was not adopted.

Mr. THAYER. It ought to have been adopted:

The CHAIRMAN. Is any motion made in reference to the matter?

Mr. THAYER. I will ask unanimous consent to move that those words be inserted. They will not alter, in any respect, the sense; they simply adopt a term by which these insti

tutions are known in certain parts of the country.

The CHAIRMAN. Is there objection to the offering of such an amendment? There was no objection.

Mr. THAYER. I move, then, to amend by inserting after the word "banks," in line twenty-four hundred and forty-two, the words "or savings institutions."

The amendment was agreed to.

Mr. WILSON, of Iowa. I move to amend by inserting the words "or savings institutions" after the words "savings banks" in line twenty-six hundred and seventeen. The amendment was agreed to. Mr. GARFIELD. I move to amend by striking out the word "duty," in line twentysix hundred and twenty-seven, and inserting in lieu thereof the word "tax;" also, by inserting after the word "dollars," in line

twenty-six hundred and twenty-eight, the words "and a tax of ten per cent. on the excess above $5,000.'

The amendment was agreed to.

Mr. BERGEN. I move to amend by adding at the end of the paragraph the following:

It shall not be lawful for the State Department, or any minister. chargé, or consul, to issue a passport to any party, unless he produces receipts, or other satisfactory evidence of the payment of all income taxes imposed on him from 1863 to the date of his application; nor shall any passport be renewed or viséed by any minister, chargé, or consul abroad, unless the same conditions are complied with.

I think, Mr. Chairman, that if members of the House fully understand this matter, they will determine that this proposition should, in some shape or other, be adopted, so that persons may not go abroad to avoid the payment of the income tax, but that all may be compelled to contribute their just share to the sup port of the Government. This is the object of the amendment. It seems to me obviously proper, and I hope it will be adopted.

On agreeing to the amendment there wereayes twenty-one, noes not counted.

Mr. BERGEN called for tellers. Tellers were ordered; and Messrs. BERGEN and PRICE were appointed.

The committee divided; and the tellers reported-ayes thirty-one, noes not counted. So the amendment was not agreed to. The Clerk read as follows:

That section one hundred and twenty-four be amended by inserting after the words "duty or tax where they first occur in said sectfon, the words "whenever the party interested in such legacy or distributive share or property or interest aforesaid shall become entitled to the possession or enjoyment thereof, or to the beneficial interest in the profits accruing therefrom, such duty or tax."

Mr. ALLISON. With a view of having a similar provision inserted in the next section, I move to amend by striking out this paragraph. The amendment was agreed to.

Mr. HOLMES. I desire to move an amendment to section one hundred and twenty-four of the present law. The portion of the section which I wish to have amended is not incorporated in the bill before us, and I shall therefore be compelled to refer to the pamphlet edition of the amended tax law, as passed March 3, 1865. Members who have this pam phlet before them will find the section on pages 86 and 87.

For the information of those who have not the section before them I will state that it provides for the taxation of legacies and distributive shares of personal property. The taxation is not uniform, but the more remote or distant the relationship of the party receiv ing the property to the party whose estate is to be distributed, the higher is the rate of taxation. There is no exemption from this taxation where the whole estate to be distributed amounts to $1,000, except that contained in the proviso to the section, which I will read :

Provided. That all legacies or property passing by will, or by the laws of any State or Territory, to husband or wife of the person who died possessed, as aforesaid, shall be exempt from tax or duty.

The exemption here in favor of the wife is just and humane; that in favor of the husband, who is suposed to have sufficient ability to take

care of and support not only himself but the entire family, is, in my opinion, of very questionable propriety. But there is another class of persons liable to taxation under this section whose claim to exemption is at least as strong as that of the wife and mother, and much stronger than that of the husband and father; I refer to the minor children of a deceased party. I have been troubled in my own mind to find any reason which will justify the exemption of the father while the property of the children is subjected to taxation. It appears to me a sufficient calamity for a child of that age to be deprived of a parent without being subjected to taxation by the Government for the privilege of becoming an orphan. I think I am justified in saying that in a large majority of cases where the father dies the children are left with a property insufficient to provide for their education and for their support until they attain the period of their majority. I do not speak of estates where the parent dies insolvent, but where small estates, amounting to from $1,000 to $5,000, are left for distribution between the widow and the children. Where no will is

made, the widow generally receives one third, while the remainder is equally divided among the children. The portion belonging to the minor children passes into the hands of trustees, executors, or guardians, the pay for whose services comes out of the children's share of the estate.

Now, sir, if there is a class of persons in the community who have a stronger claim than any others upon the justice and humanity of the Government; if there is any class on whom the hand of the Government should be laid only for the purpose of protection and not for the purpose of taxation, it is the class of persons to whom I have just referred. My own opinion is that this class of persons should be entirely exempted from taxation; but I find that such a proposition will encounter the opposition of the Committee of Ways and Means; and knowing how difficult it is to pass any amendment which that committee oppose, I have concluded to modify the proposition which I intended to offer and to submit an amendment which shall exempt from taxation the legacy or share of a minor child to the amount of $1,000. ing that in this shape the proposition will receive the concurrence of the committee, as well as the assent and support of every member of the House, I move to amend by inserting the following:

Believ

That section one hundred and twenty-four be amended by adding thereto the following proviso:

And provided further, That any legacy or share of personal property passing as aforesaid to a minor child of the person who died possessed as aforesaid, shall be exempt from taxation or duty under this section, unless such legacy shall exceed the sum of $1,000, in which case the excess only above that sum shall be liable to such taxation or duty.

Mr. MORRILL. I am very much gratified to be able to approve the proposition of the gentleman from New York; but I am pained to inform him that he is simply proposing to reenact the existing law. To satisfy him on this point let me read from the commencement of section one hundred and twenty-four:

That any person or persons having in charge or trust as administrators, executors, or trustees, any legacies or distributive shares arising from personal property, where the whole amount of such personal property, as aforesaid, shall exceed the sum of $1,000 in actual value, &c.

Mr. HOLMES. The language there is "where the whole amount of such personal property, as aforesaid, shall exceed the sum of $1,000," and under that provision there is no exemption where the amount of the whole estate exceeds that sum. My amendment provides for an exemption to the amount of $1,000 for each child. The law, as it now is, exempts the estate where the aggregate amount before division does not exceed $1,000. If it exceeds that sum there is no exemption.

Mr. MORRILL. If that is the distinction which the gentleman makes I do not see any objection to the amendment.

Mr. HALE. I move to amend the amendment of my colleague [Mr. HOLMES] by striking

it out and inserting in lieu thereof the following:

That section one hundred and twenty-four be amended by striking out from the first subdivision thereof the words "lineal issue or;" also by inserting in the proviso, at the end of said section, after the words "husband or wife," the words" or lineal issue." The effect of this substitute is to abolish entirely the inheritance of legacy tax in the case of lineal descendants. I conceive that this is the just and true policy. I do not believe that legacies in the line of lineal inheritance should be made the subject of taxation. I do not think that a tax of this sort is levied in the manner in which taxes ought to be levied so as to produce the least oppression. On the contrary, I believe that these taxes are felt to be more oppressive than all others. This substitute, if adopted, will leave subject to taxation all collateral inheritances and all legacies, except legacies to lineal descendants, who will receive their legacies free from tax precisely as does the husband or wife of the deceased person.

Mr. MORRILL. I hope the amendment of the gentleman from New York will not be

adopted. The tax imposed upon lineal de

scendants or ascendants is only one per cent. There are many large estates where all the heirs, though lineal descendants, are not mere children but full-grown men.

Mr. WILLIAMS. Mr. Chairman, I move to strike out the last word to make a remark or two on this subject. I agree entirely with the remarks of my learned friend from New York [Mr. HALE] in support of the amendment he has just offered. It seems to me the argument made by my friend from New York, Mr. HOLMES,] is applicable to the whole subject-matter of this section and furnishes conclusive reason why it should not be adopted. I have been at a loss to understand why the catastrophe of death should be singled out as the opportune occasion for the exercise of the governmental power of taxation. I know the idea comes from the old feudal law, from the system of relief, one of the oppressive appendages of that system, which rested upon the idea

that the tenure of the individual was a tenure for life, and the fee was the ultimate property of the suzerain, so that when the ancestor died it was necessary the estate should be "lifted up again. Hence the word "relief," from the Latin relevo.

Gentlemen propose to reenact these oppressive incidents of the feudal tenure. I do not know why it is we should avail ourselves of the most deplorable catastrophe which can occur to a family-the loss of its head-to strip the children and those who are helpless of the patrimony which would otherwise descend to them. I suppose there is no case where the life of the founder of the family is not worth more to those who depend upon him for support than the property he has, and where the family would not exchange the one for the other. This is certainly not in accordance with the humane theory announced by the gentleman from Vermont when he opened the debate. He said:

"If a horse runs away with a carriage, or a locomotive gets smashed, it seems oppressive for the Government to seize the opportunity of such misfortune for levying a fresh tax.'

This is also taxing calamity. It is no more than reviving one of the oppressive appendages of the feudal ages.

[Here the hammer fell.]

Mr. BOUTWELL. If we exempt the property of minor children it is as far as we need go. The amendment to the amendment was rejected.

Mr. HOLMES's amendment was adopted. Mr. HOLMES. I move to insert the words "personal property." As it now reads it covers all kinds of property, real as well as personal.

The amendment was agreed to.
The Clerk read as follows:

That section one hundred and twenty-five be amended by inserting after the words United States," in the first sentence of said section, the

words, and every administrator, exccutor, or trustee, having in charge or trust any legacy or distributive share, as aforesaid, shall give notice. thereof in writing to the assessor or assistant assessor of the district where the deceased, grantor, or bargainer last resided, within thirty days after he shall have taken charge of such trust;" and by inserting after the words "shall make out such lists and valuation as in other cases of neglect or refusal, and shall assess the duty thereon," the words "and in case of willful neglect, refusal, or false statement by such executor, administrator, or trustee, as aforesaid, he shall be liable to a penalty of not exceeding $1,000, to be recovered with costs of suit."

Mr. ALLISON moved the following amend

ment:

Strike out line twenty-six hundred and fifty-nine, and insert in lieu thereof, the following:

That section one hundred and twenty-five be amended by inserting after the words that the tax or duty aforesaid," the following: "shall be due and payable whenever the party interested in such legacy or distributive share, or property, or interest aforesaid, shall become entitled to the possession or enjoyment thereof, or to the beneficial interest in the profits accruing therefrom, and the same;" and.

The amendment was adopted.

Mr. WILSON, of Iowa. Does that affect the phraseology of the one hundred and twentyfourth section of the original act?

Mr. ALLISON. Yes, sir.

Mr. WILSON, of Iowa. If it changes the language of section one hundred and twentyfive by being made an amendment to that section, it leaves the language of section one hundred and twenty-four in the original act still remaining as the law, so that the two provisions make nonsense.

Mr. ALLISON. The original act does not provide when this tax shall be due and payable. There is no provision in the law when it becomes due and payable.

Mr. HALE. I'move to strike out the last word of the amendment for the purpose of suggesting to the gentleman who made the motion that it seems to me it requires some modification. Under the rule now held at the Commissioner's office, if a person is entitled to an annuity of $100 for life, the tax is assessed on the present value of that annuity and deducted by the executor from the first payment of the annuity. Now, that is palpably wrong and unjust. For instance, a widow has left to her an annuity for her support. It is what she depends upon. Under the construction now adopted at the office of the Commissioner the whole tax on the present value of the annuity is deducted from the first installment of the interest. It is all wrong. It should only come out pro ratâ year by year.

Mr. ALLISON. I do not know what the gentleman from New York [Mr. HALE] proposes. We do not change the existing law except as to the time when this tax shall become due and payable. Now, it should be payable, it seems to me, at the time when the party comes into possession of the annuity. If the gentleman desires to change the law in that respect, any amendment that he will suggest to the committee will of course be considered. But I do not see why, if this tax is to be paid at once, it should not be paid upon the value of the estate at the time the beneficiary comes into possession or is entitled to receive the enjoyment of the property, whether in the shape of an annuity or of actual possession of the property.

[Here the hammer fell.]

Mr. HALE. I withdraw my amendment and substitute another, to insert after the word "thereof" in the amendment proposed by the gentleman from Iowa the words "or, in case of an annuity, payable on each installment of the said annuity as the same shall be due." I think the gentleman misapprehends what the ruling in this case is. A widow or any other person who is dependent upon an annuity for support, and who requires the payment of the first installment, is subjected to a deduction therefrom of the tax on the computed present value of the whole annuity. In other words, when a widow is to receive this year $500 for her support, and next year $500, the whole $500 for the first year is wiped out by the tax on the present value of the whole annuity, leaving her destitute.

Mr. ALLISON. I suggest that the amendment proposed now does not meet what the gentleman desires to remedy, because it would then subject the annuity to an annual tax equivalent to the whole value of the property, which certainly ought not to be. It would take it out every year, whereas by the existing law the property of the estate is valued, and one tax is taken out, and that is the end of it. But the gentleman proposes to take this out every year.

Mr. HALE. My proposition will take the tax of $500 out whenever $500 is payable; no more and no less.

The amendment to the amendment was not agreed to.

The question recurred on the amendment of Mr. ALLISON, and it was agreed to.

The Clerk read as follows:

That section one hundred and thirty-seven be amended by inserting after the words "imposed by this act" the words "shall be assessed in the collection district where the estate is situate, and." No amendment being offered, The Clerk read as follows:

That section one hundred and thirty-eight be amended by adding thereto the words, "and every administrator, executor, or trustee, having in charge or trust any disposition of real estate or interest therein, subject to tax or duty under this act, shall give notice thereof in writing to the assessor or assistant assessor of the district where the estate issituate, within thirty days from the time when he shall have taken charge of such trust, and prior to any distribution of said real estate, together with a statement of the character and value thereof; and for willful neglect or refusal to do so, shall be liable to a penalty of not exceeding $500, to be recovered with costs of suit."

Mr. ALLISON. I move to strike out the words "every administrator, executor, or trustee," in the first part of the paragraph, and insert in lieu thereof "such persons."

The amendment was agreed to.

Mr. ALLISON. I move to strike out the words "statement of the character" in the latter part of the paragraph, and insert in lieu thereof"description;" also, to insert after the words "value thereof the words "and the

person interested therein."

The amendments were agreed to.

Mr. HOLMES. I move to amend the paragraph by inserting at the close the following:

That section forty-one be amended by striking out the following proviso: "Provided. That if the estate of the successor shall be defeated in whole or in part by its application to the payment of the debts of the predecessor, the executor, administrator, or trustee so applying it shall pay out of the proceeds of the sales so made the amount so refunded."

The provision which I propose to strike out amounts to this: that if a party who has received real estate as heir or devisee and paid the taxes upon it, by this act shall find himself dispossessed of the whole or any portion of such estate by reason of the executor or administrator selling the same to pay the debts of the "predecessor," that the executor or administrator shall pay out of the proceeds of the sale so much of the tax as is to be refunded under the provisions of this act. Now, sir, the Government has received this tax, and this is the proposition: either to take it again from the pocket of the party who has paid it once, or from the creditor whose debts are to be paid. I do not see any propriety or justice in either of the provisions. It is simply in one case selling the property of the person who has paid the tax for the purpose of refunding it to him instead of making the Government repay it, and in the other of making the creditor whose debts are to be paid contribute to the payment of the tax, as a punishment, I suppose, for collecting his debt from the estate of the "predecessor." The Government having secured the tax ought to refund it, instead of collecting it again from the "successor" or compelling an innocent creditor to pay it.

Mr. ALLISON. I do not think this amendment ought to be adopted. The provision as it now stands is that if a party delays asserting his title, whether it be that of mortgagee or owner, until after the succession has passed, then that party shall refund to the beneficiary the amount of tax thus paid. Now, I think that is a just provision and that it ought to

pass. The Government of the United States ought not to be required to levy this tax, make the collection, and then have a mortgagee or owner of the land come in two, three, or five years afterward and assert his title.

The amendment was not agreed to.

Mr. WRIGHT. I move to amend by striking out the words "shall give notice thereof in writing to" in line twenty-six hundred and eighty-two and inserting "who shall receive notice thereof in writing from;" so that it will read:

And every such person having in charge or trust any disposition of real estate or interest therein, subjeet to tax or duty under this act, who shall receive notice thereof in writing from the assessor or assistant assessor of the district where the estate is situate, within thirty days from the time when he shall have taken charge of such trust, and prior to any distribution of said real estate, together with a description thereof.

I think when we employ and pay an officer of the Government it is his bounden duty either to take less pay or discharge his whole duty. How would it operate where an administrator of an estate with a very limited knowledge of the law shall have been selected? As soon as the thirty days expire the officers of the law will go and complain of him, and he is at once subjected to the payment of the penalty of $500 named in the section, a part of which I have just read. We ought to use some caution in a matter of this kind, and I simply propose by my amendment to change it from devolving the duty upon the administrator, who may be ignorant of the law, and transfer it to the officer of the law, whose duty it is to see that no man escapes the performance of the duty which is required by law.

A word more and I have done. A year or two ago, when we had the Army bill up, I ventured to make the remark that there were too many tinkers about it. Now, it seems to me that that remark will apply in some measure to this bill. I fear me much that proper consideration has not been given to the various provisions of this bill. While I have the highest respect for the amiable chairman, and the competent committee who have had this matter in charge, it seems to me that in going over what we supposed to be the plain provisions of a just law, we have turned it by proposed amendments into a sort of metaphysical disquisition. And the Scotchman's definition of metaphysics, I think, will apply here: "When the mon that's listening dinna ken what the speaker means, and the mon that's speaking dinna ken what he means himsel, that's metapheesics.'

Mr. SPALDING. I offer the following as a substitute for the amendment of the gentleman from New Jersey, [Mr. WRIGHT:]

It shall not be lawful for the State Department nor any embassador, minister, chargé, or consul, to issue a passport to any party unless he produces receipts or other satisfactory evidence of the payment of all income taxes imposed on him from 1863 to the date of his application. Nor shall any passport be renewed or viseed by any embassador, minister, chargé, or consul abroad, unless the same conditions are complied with.

Mr. MORRILL. While I know the resources of wit in that corner of the House to be ample, I shall regret to see the poverty of resources which will be displayed in the columns of the Daily Globe to-morrow; and therefore I must raise the point of order on the amendment of the gentleman from Ohio, [Mr. SPALDING,] that it has already been voted down three or four times, and besides, it is not germane to anything now under consideration.

The CHAIRMAN. The Chair sustains the point of order on the ground last stated by the gentleman from Vermont, [Mr. MORRILL.]

Mr. SPALDING. Will my amendment be in order at another stage of this bill?

The CHAIRMAN. The Chair cannot tell when it will be in order.

The question recurred on the amendment of Mr. WRIGHT.

Mr. UPSON. I think the objection raised to this paragraph by the gentleman from New Jersey [Mr. WRIGHT] is fully obviated by reading the closing sentence. The gentleman

argues as if it was meant to impose a penalty on a man for neglect, when made in ignorance of the law. The last clause says that "for willful neglect or refusal so to do he shall be liable to a penalty," &c. Therefore it seems to me that his amendment is unnecessary.

The amendment of Mr. WRIGHT was not agreed to.

The Clerk read as follows:

That section one hundred and forty-five be amended by inserting after the word "years" the words "from the time when such tax or duty shall have become due and payable."

No amendment being offered,

The Clerk read as follows:

That section one hundred and fifty be, and the same is hereby, repealed.

No amendment being offered,

The Clerk read as follows:

That section one hundred and fifty-two be amended by striking out all after the enacting clause and inserting in lieu thereof the following: that it shall not be lawful to record any instrument, document, or paper required by law to be stamped unless a stamp orstamps 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 beer affixed and canceled as aforesaid shall be utterly void and shall not be used in evidence.

Mr. DAVIS. I desire to ask the chairman of the Committee of Ways and Means [Mr MORRILL] whether there is any provision it this bill in relation to a title-deed which may have been left unstamped or have been improp erly stamped through inadvertence.

Mr. MORRILL. There is a provision elsewhere in this bill providing that the deed may be stamped within a year.

Mr. DAVIS. Is there any provision by which the record of the deed in such case may be used in evidence for the purpose of substan tiating the title? According to this paragraph, if the deed should be destroyed, the original paper destroyed, the record cannot be used. because it does not appear from the record cise manner required by law. Therefore, there that the original paper was stamped in the is no mode of deducing title through a defective record. I think that point ought to be provided for, if it is not now.

pre

Mr. MORRILL. If the gentleman will look at the paragraph on page 122 of this bill, I think he will find that ample provision has been made upon the point to which he refers. The Clerk read as follows:

That section one hundred and fifty-four be amended by striking out all after the enacting clause and inserting in lieu thereof the following: that all official instruments, documents, and papers used by the officers of the United States Government, or by the officers of any State, county, town, or other municipal corporation, shall be, and hereby are, exempt from tax or duty: Provided, That it is the intent hereby to exempt from liability to taxation only such State. county, town, or other municipal corporations, in the exercise of functions strictly belonging to them in their ordinary governmental and municipal eapacity, and not to any special exemption to individuals dealing with such corporations.

tence

Mr. MORRILL. I move to amend the sen"that all official instruments, documents, and papers used by the officers of the United States, &c., by striking out the word "used" and inserting the word "issued."

The amendment was agreed to.

Mr. MORRILL. I move to amend the proviso by striking out the word "only" after the word "taxation," and by inserting the word "only" before the words "in the exercise of functions strictly belonging to them," &c. The amendment was agreed to.

Mr. MORRILL. I move to amend by striking out the words "and not to any special exemption to individuals dealing with such corporations."

The amendment was agreed to.
The Clerk read as follows:

That section one hundred and fifty-five be amended by striking out all after the enacting clause, and inserting in lieu thereof the following: that if any person shall forge or counterfeit, or cause or procure to be forged or counterfeited, any stamp, die, plate, or other instrument, or any part of any stamp, die, plate, or other instrument, which shall have been provided, or may hereafter be provided, made, or used in pursuance of this act, or shall forge, counterfeit, or resemble, or cause or procure to be forged, counter