tice, and local authorities are now showing a greater determination to suppress violations of law in prohibition States. Revenue agents in charge of divisions and their subordinate officers have been active in the prosecution of investigations of violations of the Harrison antinarcotic law. As a result of their activities and the work of collectors of internal revenue over 20,000 violations of the law were discovered, and approximately $25,000 has been offered as compromise of liabilities, in addition to fines and prison sentences imposed upon violators of the law, who were placed on trial in the United States courts. The following is a brief summary of work accomplished by revenue agents and their subordinate officers during the year ended June 30, 1917: Unpaid taxes reported for assessment: Corporation taxes and individual income taxes. Estate taxes__. Distilled spirits, tobacco, and miscellaneous taxes_-_ Offers in compromise accepted__- Collections on account of oleomargarine frauds.. Total $30, 391, 164. 22 12, 346, 334. 51 8, 183.53 3, 491, 678. 48 774, 683. 30 242, 214, 50 47, 254, 258. 54 approximately NOTE. The above receipts from oleomargarine include $175,000 tax payments made on account of assessments on oleomargarine withdrawn at one-fourth cent during various periods prior to July 1, 1914, and subsequently found on the market artificially colored and assessed at 9 cents per pound, or the difference between the one-fourth cent and the 10-cent rate. Legislation. The following is a statement of recent legislation affecting internal revenue: The act of March 3, 1917 (39 Stat., 1000), entitled "An act to provide increased revenue to defray the expenses of the increased appropriations for the Army and Navy and the extensions of fortifications, and for other purposes," provided an excess-profits tax and increased the estate tax 50 per cent. The excess-profits tax was repealed by the war-revenue act of October 3, 1917, and a new excess-profits tax enacted. Porto Rico.-An act to provide a civil government for Porto Rico, and for other purposes, approved March 2, 1917: SEC. 9. That the statutory laws of the United States not locally inapplicable, except as hereinbefore or hereinafter otherwise provided, shall have the same force and effect in Porto Rico as in the United States, except the internalrevenue laws: Provided, however, That hereafter all taxes collected under the internal-revenue laws of the United States on articles produced in Porto Rico and transported to the United States or consumed in the island shall be covered into the treasury of Porto Rico. War-revenue act.-The "Act to provide revenue to defray war expenses, and for other purposes" (H. R. 4280), passed Congress and was approved at close of business October 3, 1917, and took effect October 4, except as otherwise provided. The following is a general statement of the taxes imposed: The law provides an increase in the income tax and excess-profits tax. The rate of tax on distilled spirits is increased to $2.20 and if withdrawn for beverage purposes $3.20 per proof gallon. A tax is imposed on rectified spirits, and there is also a floor tax on distilled spirits held for sale in any quantity by others than retail dealers and by retail dealers in excess of 50 gallons. The tax on wines is increased, and taxes are imposed on sirups, soft drinks, carbonated beverages, etc. The new rate of tax on fermented liquors is double the rate under the old law. The act imposes additional taxes on cigars, tobacco, and manufactures thereof. A war tax is imposed on facilities furnished by public utilities, taking effect November 1, 1917, as follows: On amount paid for freight transportation, on express charges, on amount paid for transportation of persons, on seats, berths, and staterooms in parlor cars, sleeping cars, or on vessels, and on the transportation of oil by pipe lines and on telephone messages and telegrams for which the charge of 15 cents or more is made. Taxes are also imposed on life, fire, marine, and casualty insurance. War excise taxes are imposed on the sale of automobiles, motorcycles, piano players, graphophones, phonographs and records, moving-picture films, jewelry (real or imitation), yachts, pleasure boats, power boats, etc., sporting goods, cameras, perfumery and cosmetics and other similar articles, proprietary medicines, and chewing gum. There is a tax imposed on admissions to entertainments, also on club dues, to take effect November 1, 1917. There is also an increase in the estate tax. Stamp taxes, taking effect December 1, 1917, are imposed on bonds of indebtedness, issues of capital stock, sales or transfers of capital stock, sales of produce on exchange, drafts or checks payable otherwise than at sight or on demand, promissory notes (except bank notes), conveyances and other documents, parcel-post packages, passage tickets, and an additional tax on playing cards. The act is estimated to raise approximately an additional $2,510,000,000 during a 12-months' period. BUREAU OF ENGRAVING AND PRINTING. There were engraved, printed, and delivered by the Bureau of Engraving and Printing 343,345,005 sheets of securities, postage stamps, etc., for the use of this and other departments, an increase of 42,633,205 sheets as compared with the preceding year. The deliveries were 98,097,651 sheets of United States notes and certificates, Treasury notes, and certificates of indebtedness; 351,100 sheets of United States bonds; 7,828,045 sheets of national-bank notes; 354,000 sheets of Federal reserve bank currency; 22,490,000 sheets of Federal reserve notes; 92,485,940 sheets of internal-revenue stamps; 240,500 sheets of customs stamps; 115,898,332 sheets of United States postage stamps; 6,513 sheets of United States parcelpost stamps; 274,336 sheets of Philippine postage stamps; 1,475,020 sheets of silver certificates, bank notes, national-bank circulating notes, registered bonds, interim certificates for Philippine bonds, checks, documentary and internal-revenue stamps, and postal cards for Philippine Islands; and 3,843,568 sheets of checks, drafts, and miscellaneous. In addition to these sheets delivered, miscellaneous work was executed to the value of $123,643.30. The face value of all classes of securities, internal-revenue stamps, postage stamps, etc., furnished by this bureau amounted to $10,145,813,379.28. Compared by classes with the work executed in the previous fiscal year, there was an increase of 9.33 per cent in United States notes, certificates, and bonds; 5.69 per cent in United States postage stamps; 135.87 per cent in national-bank and Federal reserve notes; 10.4 per cent in internal-revenue stamps; 4.79 per cent in customs stamps; and 72.56 per cent in checks, drafts, and miscellaneous. Appropriations made by Congress for the operation of the Bureau amounted to $4,634,160, and the Bureau was reimbursed for services and materials furnished the several executive departments and bureaus to the amount of $1,923,187.28, the aggregate available for the work during the year having been $6,557,347.28. The expenditures were $229,853.02 for salaries; $8,400 for custody of dies, rolls, and plates; $2,113,437.73 for compensation of employees, of which $2,500 was for one employee detailed to another branch of the department and not reimbursed; $2,205,177.90 for wages of plate printers and assistants; and $1,767,250.05 for materials and miscellaneous expenses; making a total expenditure of $6,324,118.70, and leaving unexpended $233,228.58. CUSTOMS. The following tabulation of the business transactions at the various customhouses for the fiscal year 1917 shows a slight increase in nearly all customs activities over those of the fiscal year 1916: Notwithstanding these slight increases in business and the increased activities due to the war, the total number of persons employed was decreased from 6,881 in 1916 to 6,727 in 1917, and the total operating expenses were decreased from $9,813,085.13 in 1916 to $9,774,054.66 in 1917. The cost to collect $1 was decreased from $0.0456 in 1916 to $0.0428 in 1917. While the cost to collect $1 at each port of entry and for the service as a whole, as stated in each annual report, is sometimes quoted as indicating the relative efficiency of the various ports, this does not constitute a fair basis of comparison of the relative efficiency of the various ports of entry or of the Customs Service as a whole. The Customs Service does many things besides collect revenue. In normal times collectors of customs and their subordinates admeasure every vessel and boat built in the United States to ascertain its tonnage and issue a document to each vessel or boat of over 5 tons, authorizing it to engage in the coastwise trade or in the foreign and coastwise trade, as the case may be. They record all changes of masters and of bills of sale and mortgages and other papers affecting the title to vessels. They frequently act as shipping commissioners in the assigning and discharge of the crews of vessels and muster the crews of all American vessels returning from foreign ports to see that they are accounted for. They enforce the provisions of the seamen's act and other Federal laws relating to the operation and navigation of vessels and collect and account for fines imposed by them for violations of such laws. They enter and clear all vessels plying between American ports and foreign ports. They compile and furnish the Department of Commerce statistics of imports and exports, and, jointly with the Steamboat-Inspection Service, it is their duty to prevent the overloading of passenger boats. They are charged with the duty of excluding from the United States smoking opium and habit-forming drugs and the numerous other articles prohibited by law from importation. They assist the Department of Agriculture in securing compliance with the pure-food laws, so far as they relate to imports, and in enforcing the laws relating to the inspection, quarantine, and exclusion of animals and hides and of impure seeds, nursery stock, and similar articles. They carry out the regulations of the Public Health Service regulating the importation of viruses and serums and generally assist that service in the enforcement of the laws for the protection of health, so far as they relate to the arrival of persons and merchandise from foreign ports. They act as custodians of public buildings and as disbursing officers for the Custodian Service and the Coast Guard Service, and both collect and disburse funds of the Public Health Service. They collect and : account for the head tax paid by immigrants. They supervise the exportation of merchandise subject to internal-revenue tax, and also supervise the operations of bonded warehouses manufacturing articles for exportation from materials subject to internal-revenue tax. It is therefore obvious that even if all tariff laws were repealed and all merchandise were admitted entry into the United States free of duty it would, nevertheless, be necessary to maintain an extensive organization at our seaports to carry out these various activities, and it is probable that the cost of maintaining a service for the carrying on of the various activities of the Customs Service other than the collection of revenue would be nearly, if not quite, one-half of the present operating cost of that service. These various activities of the Customs Service were added to very greatly upon the outbreak of the European war. While the United States was a neutral her customs officers, in addition to their duties performed in normal times, were primarily charged with the duty of the enforcement of the neutrality laws in our various ports and harbors. This required the exercise of great vigilance to prevent the fitting out of hostile expeditions in American waters and the using of American ports as bases for the supplying of belligerent warships at sea. This included the sealing of the wireless apparatus of vessels while in our ports, the inspection of suspected cargoes to insure that they agreed with the vessels' manifests, and inquiries to determine whether such vessels actually intended to carry these cargoes to destination. It required investigation of numerous attempts to damage and destroy vessels or their cargoes and the institution of many inquiries as to the truth of numerous reports and rumors of intentions to violate our neutrality. While most of these reports and rumors were found upon investigation to be without foundation, a number of conspiracies to export cargoes under false manifests and otherwise to violate the laws of the United States were discovered and evidence furnished to the district attorneys which resulted in the prosecution and conviction of the guilty persons. These activities have been largely increased since the declaration of war by the United States. On April 6, 1917, the customs officers, under directions issued by the Treasury Department upon instructions from the President, took into custody 65 German ships lying in 17 different ports of the United States, placed guards on board such vessels to protect them from further injury or deterioration, took an inventory of their contents, made a preliminary survey of the damage done to them, employed the necessary mechanics to care for their machinery, and maintained such guards on such vessels for an average period of approximately 3 months, pending their being repaired |