The patience and even cheerfulness with which the people of the United States submitted to this severe taxation on their domestic productions, was a matter of surprise, not only among our own people, but in European countries. In 1867, accompanied by Mr. Adams, our minister to England, I had the pleasure of breakfasting with Mr. Gladstone at his official residence, and he referred to the ease with which we collected, without complaint, taxes so burdensome as ours then were. He asked me if it was true that we had collected $1,600,000 annually from a tax on matches. I told him that we not only did so but that I had never heard a word of complaint, and the quality of matches was vastly improved while their price was actually reduced. He threw up his hands and said that the people of England would not submit to such tax and if any ministry would propose it, it would soon be out of power. Strange to say an administration of which Mr. Gladstone was at the head did subsequently propose such a tax, but it was so severely arraigned that it was at once abandoned.
The income tax, varied somewhat in terms from year to year, continued in force until 1870, when it was proposed to repeal it as no longer necessary. By the terms of the then existing law it expired in 1872. I urged as strongly as I could its retention at least until the time expired, but it was repealed. I then believed, and now believe, that a moderate income tax, levied on all incomes above the sum of $1,000, or above a sum that will supply the ordinary wants of an average family in the United States with the necessaries of life, should be levied, according to the exigencies of the public service. In the present condition of affairs, I doubt the expediency of such a tax, especially in view of the decision of the Supreme Court of the United States recently rendered.
The distinction made by that court between incomes from the rent of land and other incomes seems narrow and technical. A tax upon the value of land is a direct tax, and must be apportioned among the states according to population, but it does not follow that a tax on incomes from land is a direct tax. An income means that gain which results from business, or property, of any kind, from the proceeds of a farm, the profits derived from trade and commerce, and from any occupation or investment. In common language the word income applies to money received from any source. It may be qualified as gross income and net income. It may be limited by words defining the source of the income, as, from land, merchandise or banking, but, in its general sense, it means gross savings from all sources. When received in money it is an income and not until then. An income tax was paid, and cheerfully paid, by American citizens during and since the war, in vast sums, and it did not occur to citizen, lawyer or judge that the constitution of the United States made a distinction between incomes from rents and income from notes or bonds. The states tax both land and bonds. Why may not the United States tax income from each alike? Many of the largest incomes in the United States are derived from rents. To except them by technical reasoning from a general tax on incomes will tend to disparage the Supreme Court among "plain people." If incomes from rents must be excepted, then no income tax ought to be assessed. This decision, if adhered to, may cripple the government in times of emergency. If made when the income tax was first imposed, it would have reduced the national revenue $347,000,000, for no income tax would have been enacted if rents were excluded from taxable incomes.
I do not propose to narrate the numerous internal revenue laws, which have been enacted and modified at every session of Congress since 1861, or the innumerable objects of taxation embraced in them, for such a narrative would fill too much space. The discussion of these laws occupied a large portion of the time of Congress. The articles or productions subject to taxation included for a time nearly everything for the use of man. I trust the time is far distant when such sweeping internal taxation will be required again, but if it should come, the Congress of that day can find in our experience resources more bountiful than Aladdin's lamp.
Direct taxes, to be apportioned among the states, are not likely to be again assessed after the experience we had as to the last direct tax. Besides the difficulty of collecting it, there is the palpable objection that it is an unequal, and therefore an unjust, tax. New states, and especially agricultural states, have not the same ability to pay direct taxes as older commercial and manufacturing states, having within them great cities with accumulated wealth, in the form of stocks, bonds and patents.
The office of commissioner of internal revenue has fortunately been filled, as a rule, by gentlemen of standing and character of a high order of intelligence, and their work has been of great service to the United States. This important bureau ought to be, and no doubt will be, retained as a part of the organized machinery of the government, and the taxes collected by it will be necessary as long as our public debt remains, and until the list of pensioners will be obliterated by the hand of time.
CHAPTER XIV. LINCOLN'S EMANCIPATION PROCLAMATION. Slavery in the District of Columbia Abolished—Law Goes Into Effect on April 10, 1862—Beginning of the End of Slavery—Military Measures in Congress to Carry on the War—Response to the President's Call —Beneficial Effects of the Confiscation Act—Visits to Soldiers' Camps—Robert S. Granger as a Cook—How I Came to Purchase a Washington Residence—Increase of Compensation to Senators and Members and Its Effect—Excitement in Ohio over Vallandigham's Arrest—News of the Fall of Vicksburg and Defeat of Lee at Gettysburg —John Brough Elected Governor of Ohio—Its Effect on the State.
Another question of grave political significance was presented to the 37th Congress early in this session, that of the abolition of slavery in the District of Columbia. I had from the beginning declared my opposition to any interference with slavery in the District, but the changed condition of the country demanded a change of public policy in this respect. Slavery was made the pretext for, and, I believe, was, the real cause of the war. It had a foothold in the District of Columbia, but it existed there in its mildest form. By the census of 1860 there were, in the District of Columbia, 11,107 free negroes, 3,181 slaves, and 60,785 white people. It was considered the paradise of free negroes, where they were almost exclusively employed as laborers in household service.
When the war broke out a considerable number of slaves ran away from disloyal masters in Virginia and Maryland, seeking safety within our lines and finding employment in the District of Columbia. As the war approached, most of the slaves in the District were carried away by their owners into Virginia, and other southern states, so that in 1862 it was estimated there were not more than 1,500, and probably not 1,000, slaves in the District, while the number of free negroes increased to 15,000. As a matter of course, when Virginia seceded no attempt was made to recapture runaway slaves from that state, and they became practically free. It was known that there was at that time a strong disposition in Maryland to try the experiment of emancipation, and it was believed that after the war was over Virginia would adopt the same policy. Little doubt was felt as to the power of Congress to abolish slavery in the District, should such a course be deemed expedient. By the constitution Congress was invested with express "power to exercise exclusive legislation, in all cases whatsoever, over such district as may, by cession of particular states, and the acceptance of Congress, become the seat of government of the United States." This power had been recognized by the most eminent statesmen of our country, and also by the Supreme Court of the United States. Until Mr. Calhoun doubted or denied the power it was not questioned by any considerable number. The real question was whether that was the time for emancipation. I endeavored to give to the subject careful consideration, and came to the conclusion that it was expedient then to emancipate the very few slaves in the District, fewer than there had been at any time within forty years, and fewer than would likely be in case the war should end. I believed also that the social influence of Washington, and the wealth and property controlled and owned in a great measure by slaveholding residents there, had been always against the government of the United States and in favor of the Rebellion. While slavery existed it was a constant source of annoyance and irritation. The great mass of our constituents were opposed to slavery, morally, socially and politically. They felt it was wrong and would not change their opinion. As long as slavery existed in the District, where Congress had the power to abolish it, agitation and excitement would be ceaseless. The great body of the people of the northern states were opposed to the institution theoretically, as were very many of the most intelligent people of the southern states. I felt that now was the time when this moral conviction should be heard and heeded by the national legislature. I felt that we were bound to consult the material interest of the people of the District, and that emancipation would add to the value of their property and also add to the population of the city. The abolition of slavery would bring to the city intelligent mechanics and laboring men who would never compete with the labor of slaves, and who, finding none there but freemen, would develop the great advantages of the city. In a speech I made upon the subject I enlarged upon this consideration and said:
"I see no reason why Washington, with a free population and as a free city, situated here at the head of the Potomac, with remarkable facilities of navigation, with great conveniences of communication, reaching to the west by the Baltimore and Ohio Railroad, the political capital of the country, might not be a great free city, illustrating by its progress the operation of free institutions. But it can only be done by the active, interested labor of free people. Simply as a municipal regulation it would be wise to abolish slavery in this district, because slavery is opposed to the moral convictions of the great mass of the people of this country, and the existence of slavery here keeps out of this District an active, loyal, true, manly, generous body of laborers, who will never compete in their labor with the labor of slaves."