The report of a commission appointed for the revision of the revenue system of the United States. JANUARY 29, 1866. -Referred to the Committee of Ways and Means and ordered to be printed. TREASURY DEPARTMENT, January 29, 1866. SIR: Herewith I have the honor to present to you a report from Messrs. David A. Wells, Stephen Colwell, and S. S. Hayes, appointed a commission for the revision of the revenue system of the United States, in accordance with the provisions of the 19th section of the amendatory act of Congress, approved March 3, 1865. In presenting this report, it may be proper for me to remark that, with the single exception, perhaps, of the one in regard to the time at which the payment of the principal of the national debt should be commenced, the recommendations of the commission have my hearty approval. The very important work devolved upon the commission, as far as it has been prosecuted, has been most admirably performed. I earnestly ask that the report may receive the early and careful consideration of Congress. I am, very truly, your obedient servant, HUGH MCCULLOCH, Hon. SCHUYLER COLFAX, REPORT OF THE UNITED STATES REVENUE COMMISSION. TREASURY DEPARTMENT Office of the U. S. Revenue Commission, January, 1866. SIR: The undersigned, members of the commission appointed by the Secretary of the Treasury in accordance with the provisions of section 19 of the amendatory act of March 3, 1865, "To provide internal revenue," &c., have the honor to submit the following report: The following are the provisions of the act, above referred to, constituting this commission : "That the Secretary of the Treasury is hereby authorized to appoint a commission, consisting of three persons, to inquire and report at the earliest practicable moment upon the subject of raising by taxation such revenue as may be necessary in order to supply the wants of the government, having regard to and including the sources from which such revenue should be drawn, and the best and most efficient mode of raising the same, and to report the form of a bill; and that such commission have power to inquire into the manner and efficiency of the present and past methods of collecting the internal revenue, and to take testimony in such manner and under such regulations as may be prescribed by the Secretary of the Treasury." The commission, thus authorized, became fully organized in June, 1865, by the appointment of the following members: David A. Wells, of New York; Stephen Colwell, of Pennsylvania; and Samuel Snowden Hayes, of Illinoiswith E. B. Elliott, of Massachusetts, as secretary; and has, since then, been constantly engaged in the discharge of the duties assigned to it. The creation of a commission charged with the investigation of important public questions with reference to future legislation, and, at the same time, consisting of other than members of the National Legislature, was undoubtedly a novelty in American experience. It finds, however, frequent precedents both in Great Britain and in France, and is believed to present some obvious advantages over the methods, ordinarily followed, of conducting such investigations through congressional committees. In the present instance, a more unrestricted opportunity has been afforded to the commission for personally inquiring into and making themselves practically acquainted with the nature and character of some of the great sources of national revenue, and of observing the operation of the revenue laws in respect to the same, than could have been well enjoyed by a congressional committee, upon the members of which would have rested, at the same time, the onerous and responsible duties of legislation, the many and varied claims of constituents, and also, to a greater or less extent, the claims of important private interests. The commission, therefore, in view of these advantages, confidently anticipate that the first result of their labors, as now presented, may receive the unbiased judgment of the Congress to which they are to be submitted. Previous to the year 1861 the United States stood before the world in the anomalous position of a great nation with, substantially, no national debt. Since then the measures required for the maintenance of the national existence have entailed upon the nation a debt rivalling or exceeding in magnitude the accumulated deficits of any of the old states of Europe, and rendering necessary the collection of an annual revenue which, though at present somewhat indefinite, may be safely stated as unparalleled by the collections of any other nations, with the exception of France and Great Britain. The question of the hour, then, is, "In what manner shall this debt be treated, the payment of its interest be provided for immediately and recurringly, and the payment of its principal gradually, without impairing the strength and resources of the nation, or of arresting its progress and development?" To endeavor to answer this question in part, is the business with which the commission find themselves charged by the appointment of the Secretary of the Treasury and the authority of Congress. The same exigency which created the debt, has also rendered it expedient that the nation should thus far avail itself of every means in its power to raise, by direct and indirect taxation, the largest possible revenue in the least possible time, without much regard to acknowledged politico-economic laws or precedents; so that, at the present time, the sources of national revenue may be said to be commensurate and co-extensive with every department or sub-department of trade or industry in the country, as well as of every form of fixed or circulating capital. It accordingly became apparent to the commission, at the outset, that any attempt to embrace in their investigations, prior to the time of the presentation of a first report, the whole field of inquiry assigned to them, would not only be impracticable, but, also, that any effort with this object in view would, from its necessary diffuseness, lead to no practical or satisfactory results. They therefore, in default of any specific instructions, either from Congress or the Secretary of the Treasury, other than were contained in the act authorizing the commission, adopted the plan of taking up specifically, for investigation, those sources of revenue which our own experience and the experience of other countries have indicated as likely to be most productive under taxation, and most capable of sustaining its burdens. The result of these investigations the commission propose to submit in the form of independent and special reports. In carrying out this plan, they have sought to make themselves practically acquainted with each subject of inquiry by personal inspection, (when the investigation related to a specific branch of industry,) and by putting themselves in all cases into direct and frequent communication with revenue officials, and with representative business men from every section of the country. The commission have also, in most cases, caused the information communicated to them to be received in the form of testimony, under oath, and to be faithfully reported; and they express the hope that Congress will consider it expedient to order this record to be preserved in printed form. Representing, as it does, the experience and matured opinions of the best business men of the country, each speaking about his own profession, and often revealing facts which, in daily life, are screened from the public eye, this testimony cannot but be of great value for future reference; and in laying it before Congress and the people of the country, the commission feel that they will have rendered an important service, whether their specific recommendations shall be adopted or not. The parliamentary archives of Great Britain contain many such repertories of evidence, to the value of which the public men of England, and the scientific inquiries of all countries, have again and again testified. It is evident that the work of the commission, prosecuted in the manner described, must necessarily be protracted and laborious. The six months during which they have been occupied have scarcely been sufficient for becoming acquainted with the requirements of their work, and for the gathering of materials to serve as the basis of investigation; and the unconsidered statements and memorials touching the relation of the business interests of our country to our revenue system, which have thus far accumulated in their hands, will require at least six months for their proper examination and discussion. They accordingly offer no apologies, if in this their present report the extent of their investigatons should seem too limited for the time during which they have been occupied. One of the greatest difficulties encountered from the outset has been to obtain exact and comprehensive information; and the commission, as the result of their experience, feel warranted in asserting that no full and reliable statistics concerning any branch of trade or industry in the United States, with possibly a few exceptions, are now or have ever been available. The census of 1860, only made available for detailed reference some four or five years after its enumeration, has been to the commission of but little service. Nor do the statistics which have been furnished from time to time by the Treasury Department afford the knowledge of those facts which are so essential as a groundwork for the labors of the commission. On the 9th day of August, 1865, in response to a call for information relative to the importation of spirits distilled from grain, and the duties accruing there-from, the following returns were sent: Statement (submitted August 9) exhibiting the quantity of spirits distilled from grain imported into the United States, with rates of duty and imposts accruing thereon, during the fiscal years ending on the 30th of June, 1862 to 1864, inclusive. Subsequently the commission, finding that the above returns did not, in any degree, correspond with the statements of the New York trade, called for a reexamination of the same, and, in answer to their call, were furnished with a restatement of the foregoing returns, as follows: Statement (submitted November 2) exhibiting the duties collected upon the importations of spirits distilled from grain, at Boston, New York, Philadelphia, Baltimore and San Francisco,* during the fiscal years ending June 30, 1862, 1863, and 1864. In further illustration, they also submit copies of the returns sent to the commission, under dates of September 12 and November 2, 1865, respecting the imports and duties accruing on chiccory. Statement (submitted September 12) exhibiting the quantity and value of chiccory imported into the United States, with rates of duty and imposts accruing thereon, for the following years : Statement (submitted November 2, 1865) exhibiting the duties collected on the importations of chiccory, &c., at Boston, New York, Philadelphia, Baltimore, and San Francisco,* for the following years : Jnne 30, 1864 7,069,186 1 to 2 cents. 66 $102,600 30 140,402 98 † 160,750 83 ...... .... * Returns from San Francisco received only up to April 30, 1864. † Although the latter table embraced only the five principal ports, yet it will be observed that the quantity and value of chiccory imported in the year 1864, as given therein, exceed in amount those given in the former table, which purported to include the returns from all the ports in the United States. |