introduced into the country without paying the lawful tax or duty, and the forfeiture of vessels used in that unlawful trade, prizes taken in war, and fees required to be paid to various officials when their services are employed, are minor sources of revenue.

3. When all these are not sufficient, as in time of war, or when an immense war debt is to be paid, direct taxes are laid on the property and business of the country. This is called

THE INTERNAL REVENUE,

and is borne with more or less patience, according as the people regard the end to be gained important. The revenues of the States are mostly derived from this source. They are not allowed to raise their revenue from foreign commerce, since that would be a tax on goods liable to be paid by the people of another State.

4. The necessity of laying large direct taxes does not, in this country, often arise in case of the General Government; but during and after the gigantic Civil War between the North and South, when enormous expenses had to be met, and the credit of the government sustained, the direct taxes became very large indeed. In 1861 Congress passed the "Internal Revenue Law," by which twenty millions of dollars were to be annually raised from direct taxes on houses and lands in each of the States and Territories.

By subsequent acts not only houses and lands were taxed, but almost every sort of property and business. Licenses were required for persons to carry on their profession, trade, or business; incomes were taxed; deeds, mortgages, notes, bonds, bank checks, and papers of almost every kind were invalid unless they had a revenue stamp upon them. Manufacturers had to pay a certain per-centage on whatever they made. Scarcely any calling, trade, profession, or business escaped it, directly or indirectly.

5. To carry out these provisions, the whole country was

divided into Revenue Districts, corresponding, so far as convenient, with Congressional Districts. An officer of the Treasury Department, called the Commissioner of Internal Revenue, was appointed, charged with the duty of preparing instructions, forms, blanks, stamps, and licenses, to be used in the collection by the multitude of minor officers employed, and of overseeing the whole work. Each district had its chief officer, and his deputies, assessors, and collectors, by whom the money at length reached the Treasury at Washington. It created an army of officers to be paid. It was laid aside as soon as possible, and taxation made less onerous and expensive. The remarkable prosperity of the country at that particular period made. it easier to bear. Direct taxes laid by the General Government are more economically collected by the State or local officials, in all ordinary cases. This was a very extraordinary and pressing one, and the people were so eager to put their debt in the way of extinction that it was endured with much patience for several years, when most of this cumbrous and costly machinery. was laid aside.

6. The vast war debt, the large number of government officers employed in attending to the interests of so large and prosperous a country, the support of the army and navy, the great number of foreign representatives and agents of the government, and the public works necessary for the development or protection of the country, make a large revenue indispensable.

7. It is best when the people are free and intelligent that they be governed as little as possible-or rather that they govern themselves as much as possible, and that as few officials as may be live on the fruits of other people's labor. There must necessarily be an army of them, at the least; but such arrangements should be made that public expenses may be reduced to the lowest point, and republican simplicity everywhere reign. The principle and habit of public economy should be earnestly insisted on, since the handling of immense sums of public money is much more demoralizing than the acquisition of

private wealth in legitimate ways. It is a strong temptation to men of weak moral character; and private property is more likely to be carefully used and economically expended than public funds. The smaller the revenue, consistent with the general development of the country, the better,

CHAPTER XI.

DUTIES AND TARIFFS.

1. Duty is a term used to designate a sum paid by foreign merchandise coming to our country for sale, for the privilege of entering and being offered to purchasers. Tariff is a rate, or scale, of duties.

2. Ever since intercourse has become frequent between different nations commerce has been occupied in effecting interchanges of the products and industries of each country with others. Each country has peculiarities that specially fit it for the production or manufacture of some article, or list of arti cles, which others would be unable to produce, or would produce at greater inconvenience and expense, and which is of high value to all, or many of the others. The social principle has proved to be of extreme value to the improvement of men, and to their happiness; and we might say that, in this unequal distribution of capacities in the lands, and the races who inhabit them, the exercise of the social principle, on a broad scale, was made, by nature, indispensable.

3. Each nation, then, devotes itself to its special features of production, and exchanges its surplus with others for what it wants of their different surplus, to mutual profit. Just as A is a farmer, and raises grain, while B is a mechanic. Each has a natural adaptation to the business he pursues, and each needs what the other produces. So they exchange, and each has the full benefit of the success and different genius and resources of the other. Commerce is the same in principle, and interchange becomes constantly more extensive.

4. Government naturally regulates commerce because it is one of the general interests of the country. It finds an indefinite amount of foreign merchandise waiting to enter to be put on sale. It was long ago discovered that here was a convenient mode of producing a government income without disturbing the people with a constant demand for money to pay its expenses. Whatever foreign goods had to pay for permission to enter, was quietly added to the price afterward, and so the people paid their taxes to the government in an indirect way in the form of a Duty. They pay the price asked, if it be within their means, without knowledge, or thought, of what part goes to the government, unless they study the subject carefully.

It has always been the case, then, that a government could get all the money it wanted, from this source, in ordinary times, with very little trouble. That mode is naturally a favorite with them. Whether it is the best way for the people is another question, which has been, at different times, very warmly debated in our government. It is not our place here to take up the argument, but it is worthy of a careful study by the people.

5, A Tariff of duties is established to carry on the government. There is another object that has had many advocates, and has quite commonly exerted an influence to raise the tariff on some things. It is stated in the preamble, or introduction, to the first act passed by the first Congress, on this subject, July 4th, 1789, "Whereas, it is necessary for the support of the government, for the discharge of the debts of the United States, and the encouragement and protection of manufac tures, that duties be laid on goods, wares, and merchandise imported." It was considered important to protect and encourage our manufactures, by putting so high a price on the same kind of foreign goods that ours would have the advantage and sell at a less price or greater profit.

This might have been a wise measure, in the early days of the country, when there were few manufactures. Whether it has been so since, or is so now, is not so clear.

6. Every man should make up his mind what is right and best and act as he sees to be most for the general good. It has two disadvantages. It embarrasses the interchange that we have described as so profitable, and under a high tariff sometimes practically forbids it. It is unsocial, and we declare by it, that we will, so far as possible, live within ourselves, and have as little to do with our neighbors as we can. Besides, it is our own people who have to pay the duty, mainly, if they use the foreign goods; or the higher price on domestic goods if they buy them; so that one class of the people, that is, the the mass of them, pay another small class large sums to manufacture what might be bought from foreigners with less money. It is a fine thing for the manufacturers, but not quite so fine for those who buy them, unless they feel like making their countrymen a present for every piece of goods he will manufacture for them, beside the proper cost as made by others.

It has the advantage of encouraging industries of different kinds; and has been believed to contribute greatly to the general prosperity in that way. Some think it best to let all those things arrange themselves, and leave each nation to bring us what they can produce cheapest and sell them more of what we can produce cheapest. They believe this is the secret of prosperity, besides being more social. It is a question to be carefully examined. It seems probable, that, in the end, all nations will agree on this policy, and raise their revenue in some other way. It is perhaps too soon to expect that, as yet.

We have never been without a tariff, though there has been much discussion in Congress, and between parties, whether it should be protective or not. So it has often changed from low to high and back again. The necessities of our war, and the heavy debt, made it important, in the highest degree, to raise all the revenue we could, and the subject has not been much discussed for many years.

7. The Duties are mostly collected in the cities, and, as foreign goods come mainly by water, in the seaports of the country. Duties are often called Customs, and the places where