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Speech on War Financing,
July 24, 1961 in Congress

 

    Mr. Stevens. We are all conscious that this bill is a most unpleasant one. The Committee of Ways and Means are conscious that it is a most unpleasant duty for them to propose such a measure; and that it must be a most unpleasant duty for the House to adopt it, if this cup can pass from them. But, sir, we perceive no way in which we can avoid it, and sustain the Government. The rebels, who are now destroying or attempting to destroy this Government, have thrust upon the country many disagreeable things. It is unpleasant to send your sons and your brethren to be slaughtered in this unholy war. It is unpleasant to send the tax gatherer to the door of the farmers, the mechanics, and the capitalists of the country to collect taxes for defraying the expenses of this war. All this is disagreeable, and we all feel it alike. But, sir, both these things must come, or this Government must soon be buried in its grave. And, sir, when we have to choose between these disagreeable duties; when the annilhation of this Government is the alternative on one side, no loyal man can hesitate which to choose.

    Now, sir, a single word in regard to the practicability of the amendment of the gentleman from New York, (Mr. Roscoe Conkling.) If it were practicable, I should certainly be in favor of its adoption. It will be seen by those who have looked into the provisions of this bill – and it is to be presumed that very few have, for it was not printed and open for examination until this morning – that it provides for two kinds of taxes; one direct upon real estate owned by the people, the amount being apportioned among the people according to Federal population under the Constitution. That is provided for in the way suggested by the gentleman from New York, or in a manner tantamount to the plan suggested by him, by the provision that if the States assume the debt within a given time, then there shall be no assessment upon real estate. The thirty-ninth section makes that provision – I do not expect that members can have read the whole bill, and therefore I refer to provisions in this way – but we can find no possible way for commutation of our internal tax or excise tax. By internal taxes, I mean those levied upon personal property, such as carriages, horses, and watches, and excise upon liquors, as produced at the distilleries, and commodities of this kind.  I say it is impossible to fix any mode of commutation for this species of tax, for there is no possible way of the amount to which each State should be assigned. Some of the States have a very large preponderance of this personal property. The tax will fall particularly heavy upon the large cities and upon the older States, while the direct taxes will fall more heavily upon the new States; but as I said, there is no way of ascertaining in advance what the amount of this internal tax will be in any one State; nor can we point out any mode by which the amount can be ascertained at less expense than that provided in the bill.

     The gentleman from New York has suggested that a requisition be made upon the Governors of the States. Well, sir, if they would respond, and the Legislatures would carry out the requisition, that would accomplish the object; but here is the very difficulty which the bill was framed to meet. It is the very difficulty which was found under the old confederation. By the Articles of Confederation, Congress called upon the different States to furnish their quota which was accessed upon them. The result was, that some of the States raised it, while others refused to raise it; and there was no provision under the Articles of Confederation of enforcing the requisition. And it is was mainly on account of this great defect that a convention was called, and the present Constitution framed. That Constitution authorized Congress to call upon the States – not upon the Governors or Legislatures of the States, but upon the people directly. To call upon the States is the only alternative left us; but the choice we have presented to the States in relation to direct taxes cannot be presented in regard to the internal taxes. I appreciate fully the object of the gentleman from New York; and if under our Constitution his plan could be carried successfully into effect, I would join him in advocating it. But, sir, the capitalists must be assured that we have laid taxes which we can enforce, and which we must pledge to them in payment of the interest on their loans, or we shall get no money. For these reasons, sir, I oppose the amendment of the gentleman from New York.

    (Other House members speak on Conkling’s amendment)

    Mr. Stevens.  I suppose the gentleman does not intend to be considered as technically correct when he speaks of direct taxes upon personal property. A direct tax, under the Constitution, is a tax upon real estate. Now, we have levied a tax upon all real estate. We have levied a tax upon the various articles which are mentioned; but we have not gone into the question of an income tax. That question is a large one; and in England that system has been practiced upon for some time. An income tax may be the most equitable that can be raised. It is a tax upon merchandise, upon professions, or upon anything of that kind; and if it is deemed advisable hereafter to levy such a tax, it can be done; but the committee has not advised it at this time. As to the tax upon the land, it has been levied alike upon all; and I do not see how you can alter it. The valuation is to be made according to the location. I do not see how you can very well get at any other kind of property without laying an income tax.

     I should regret, as much as the gentleman from Indiana would, to raise a larger revenue than is necessary. In the first place, the direct tax upon the loyal States amounts to $20,000,000. After paying the expenses of the collection, and allowing something for taxes which may not be collected, there will probably be $18,000,000. We have estimated – and this is a mere estimate – that the internal taxes will be $28,000,000. We hope that the revenue bill passed some days ago will produce $20,000,000 (an expanded tariff bill. Ed.); amounting in all to nearly $50,000,000. We cannot calculate that the tariff law of last year will produce this year over twenty or twenty million dollars.

    (Various House members discuss how to make the tax equitable on all states and all kinds of property.)

 

Mr. Stevens. If I understand the object of the amendment of the gentleman from Indiana, (Mr. Colfax,) it is to strike out entirely that portion of the bill which provides for direct taxation. He does it upon the ground that we do not need the money now, and that it would be odious to tax the real estate of the country, upon which alone, under the Constitution, direct taxes can be imposed. Sir, let me tell the gentleman that all taxes are odious; and the statesman who is afraid to meet that odium when the Constitution of the country requires it to prevent its overthrow, is hardly fit for these times. Does the gentleman mean to say that we do not need the money? We have authorized the borrowing of $250,000,000; our public debt already amounts to $100,000,000; making $350,000,000, if we borrow the money. Beside the sum which we must pay for interest on this amount, we have to meet the ordinary expenses of the Government; and I ask the gentleman, for these ordinary and extraordinary expenses of the Government during this emergency, where is the money to come from? Where does the gentleman find the means for meeting these demands? He would put off the provision for six months. Sir, by putting it off six months, you also put it out of the power of the Government to provide arms and munitions of war for six months: and we are left without means of preparation for the great events that are on us. There is no man in this House at all acquainted with the financial concerns of the Government, who does not know that neither the capitalists in this nor any other country will ever lend the Government money when it makes no provision for its redemption; and I tell the House that, unless such provision is made, the loans you have already authorized will not be taken, and the Treasury will be left without a dollar.

    You have authorized the calling out of half a million men to put down this bloody rebellion; and when you have authorized the President to do that, you are for taking from him the means which are necessary to furnish them for the field. I do not understand what the gentleman means. Does he not expect that Congress will provide the necessary appropriations for the pay and equipment of the troops? Must we take from the Government all means of negotiating this loan? If this $30,000,000 is to be stricken out, $20,000,000 of it to come from the free States, then we will have left the internal tax, which cannot produce over $10,000,000. That, added to the revenue bill we have already brought in, and to the ordinary revenues of the Government, cannot produce enough to defray what were the ordinary expenses of the Government before this war arose, and to pay the interest on the public debt. It is as much as to say, when you have stricken down the provision, you have stricken down all the appropriations for this war. You have paralyzed the efforts of the Government. After you have ordered them to do certain things, you have taken away the means of doing it.

    Now, the gentleman does not expect, I suppose, that his war is only to last for a few months, and that we will not need this money. He does not expect that it will cease of itself. I look upon it, as I have looked upon it even since these States went deliberately into treason, as one which will be a protracted and bloody war.  Some gentlemen have an idea that our enemies, being rebels, will surrender – will succumb in the course of a few months, and with little expense, and that they will not fight the battle they have undertaken. I flatter myself with no such hope. I believe that the battles which are to be fought are to be desperate and bloody battles; and that they are to be numerous. I believe that many thousand valuable lives will be lost, and that millions of money will be expended. The only question is, whether this Government is prepared to meet all these perils, and to overcome them. If they are, they must submit to taxes which are burdensome; which the people, I know, at any other time, would not submit to for a moment; but which I believe they will now submit to. I object to the amendment of the gentleman from Indiana (Mr. Colfax) altogether…

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