As I had been elected to the House of Representatives in November, 1862, I resigned my office of commissioner of internal revenue March 3, 1863. Mr. Chase was very unwilling to have me leave, and he endeavored to satisfy me that there was neither illegality nor impropriety in my continuing until the meeting of Congress. I did not agree to his view of the law, and moreover, Congress had so changed the law that the commissioner was required to give bonds. In presence of that requirement I should have left the place. By the same act a cashier was authorized, and thus it happened that when the commissioner was actually in receipt of the moneys the Government had no security and yet security was required when he was deprived of the power to touch one cent of the receipts. I remained at Washington from March 3 to August, engaged in the preparation of a work upon the Revenue System. This volume contains the rulings and decisions by me most of which have been sustained by the courts or justified by experience.*
My successor was Joseph J. Lewis, a country lawyer from Pennsylvania. He had written a biography of Mr. Lincoln, and he had been the President's choice at the outset. When I resigned, the President had his way. Whether Mr. Chase presented any other person I cannot say. Mr. Lewis had no idea of the work of administration. When questions were submitted to the office, he proceeded to prepare an answer which he wrote with a quill pen in his own hand. At the beginning he sent off his answers without the knowledge of the chiefs of division, and in some instances a newspaper report was the first information that the subordinates obtained that a decision had been made. In some instances he passed upon old questions, without any inquiry or examination, until it was discovered that the head of a division was ruling one way and Mr. Lewis was ruling another way at the same time.
When I left the office in March, 1863, Mr. Chase said to me that it exceeded in magnitude the entire Treasury Department, March 1861. It was in fact the largest Government department ever organized in historical times, and it was organized without a precedent. By its machinery, it became finally so vast, that three hundred and fifty million dollars were assessed and collected in a single year. In the thirty-eight years of its existence, the gross collections have amounted to $5,524,363,255.89. It has existed eight and thirty years with no other changes than such as have been required by the change of laws. The frame work, including the system of bookkeeping with its checks and tests, remains.
When I entered upon the work in July, I examined the records of the Excise Bureau established during the War of 1812, but they furnished no aid whatever in the execution of the work that was before me. I had neither time nor opportunity to study the excise system of Great Britain; and hence the organization of the system of the United States was based upon, and grew out of, the requirements of the law. I do not deem this a misfortune. The public anxiety in regard to the construction of the law induced a large amount of correspondence with persons in various parts of the country, and in the month of October the letters sent numbered occasionally eight hundred per day. Many of these letters were formal, and others were repetitions of those previously given; but each day compelled attention to a large number of new questions.
The practice of our office in the construction of the law was controlled by a few leading principles.
First: to levy a tax in those cases only which were clearly provided for by the statute and, consequently, whenever a reasonable doubt existed, the decision was against the Government and in favor of the contestant.
Second: In deciding whether an article was or was not a manufacture, it was the practice to ascertain how it was regarded by business men at the time the excise law was passed; in all cases abstaining from inquiry as to the mode of preparation, or the nature or extent of the change produced. If the article in question was regarded by the makers and by business men as an article of commerce, and it was produced by hand or machinery, it was the practice to treat it as a manufacture under the law, unless specially exempt.
Third: Upon articles manufactured and removed for consumption by the manufacturer, the tax was assessed precisely as it would have been assessed if the articles had been removed for sale.
Fourth: In considering the law relating to the use of stamps, it was the rule of the office to give that signification to the name used in the statute descriptive of various instruments subject to stamp tax, which was ordinarily given to such descriptive terms by business and professional men. In the year 1901 it may be assumed that the Internal Revenue Office will exist while the Government shall exist, although it came into being as a war measure and as a temporary policy.
[* In the early sixties I was associated in the profession with a man eight years my junior, John Quincy Adams Griffin. He was a man of infinite jest, but lacking in fancy. His letters and other writings would make a volume of no mean quality. His death came too early for an extended and lasting reputation. In his sallies he did not spare his friends, and he wounded his opponents. On one occasion as we were upon the street I was induced to buy a paper by a boy's cry "Great battle!" When I opened the paper the sheet was a blank. I said: