July 12, 1909

So much for that.

Now, Mr. Speaker, this Capitol is the civic temple · of the people, and we are here by direction of the people to reduce the tariff tax and enact a law in the interest of all the people. This was the expressed will of the people at the polls, and you promised to carry out that will, but you have not kept faith with the .American people.

The Dingley law carries the highest tariff tax of any J law that was ever enacted by Congress, and you gentlemen were elected-again intrusted with power-on the distinct understanding and in the firm belief on the part of · the people t hat you would reduce the tariff tax and lo;TTrer the D1' . Dingley r·ate!'!, and yet the Payne tariff bill that passed the House incre a sed the tariff tax and carries a higher rate than the Dingley law; and now comes the .Aldrich bill, which is the most obnoxi o us and burdensome tariff scheme that e ' ever found sanction in either branch of the .American Congress. The tariff barons are in complete control, and the .American people have been deceived. The Republican party is going to be called upon to give an account of its stewardship. At the judgment bar of the people you must account for your broken campaign promises and your violated platform pledges, . and all signs indicate that you will hear the dread sentence, "Depart from power, you unfaithful Yom· failure to reduce the tariff tax is an admission that your party is absolutely in the hands of the favored few who profit by a high protective tariff. Your failure to revise the tariff downward, as you promised you would do, stamps you with deceit and unfaithfulness to the American people and brands your party as unworthy of their confidence any longe~~

Thi s is plain ' talk, Mr. Speaker, but llQl plainer than . the acts j;ustify, Your declarations that you would re-vise the tariff downward sounded from every stump, in the last national cam­ :r:iaign, and yet your promises have not been kept. Your platform pledges to revise the tariff downward were printed in an the newspapers of · the country and carried by your literature into the homes of all the people, but, alas! those · pledges have not been fulfilled.

I derive no pleasure, 1\Ir. Speaker, in calling attention to this situation because it helps the Democratic party; I deplore the miserable condition that it reveals. My heart is made sad and a sense of shame and humiliation steals upon me when I see the purse-p.roud barons of high-tariff protection write t.he statute laws by which th.ey become enormously rich and politically powerful at the expense and to the great injury of the masses of the people. [Applause on the Democratic · side.]

And these men around whom the operation of your unjust tariff laws has piled millions, reveling in luxury, retire from bu iness at wm and say in their hearts, Soul, take thine ease.” But; il\ I would remind you of a struggle out yonder among the bread earners of America. This struggle is unceasing. . No field is cleared in the battle for bread; no bugle sings truce to the toiling millions; . and yet under this miserable Aldrich bHl the indu try and skill of the man who toils are taxed, but tile t.orhme ot the :i:dle rich escape the scrutinizing eye of the Republican party. [Applause on the Democratic side.]

The great body of consumers: struggling for the wherewith ta buy the simple necessities of life are taxed, and heavily taxed, by this Aldrich bill, not only to raise revenues · to meet the extravagant expenditures of the Republican party, but taxed for the benefit of those who profit by the Republican policy of high protection-those who · furnish the Republicans with campaign funds with which to • corrupt the ballot and debauch American manhood. [Applause on the Democratic side

The simple wants of the plain people are taxed beyond all reason, while the- comforts and conveniences . of life are placed beyond their reach.

The man wb.e is . not willing to, work, who drifts aimlessly through life, does not deserve much consideration by anybody but, sir, the. ma.n who is willing to- employ the powers · that God has given him in the effort to · better his condition, to: gratify his legitimate wants, deserves the commendation of every honest man, and, in the name of justice, I demand for him a fair chance in the struggle for existence .

When you, b;y tariff taxation, lay heavy burdens upon the things that this man needs and must have to make his wife and children comfortable and happy, you are working . injury to this man and his family-you are , standing between them and a worthy existence, and you are committing a crime against the American home.

The great G-Od who so bountifully blessed this old world: in the thmg!Y with which to feed, clothe, . and shelter the people, never intended that a f.ew men should claim all the · increase from ocean, soil, and air, and th~ fathers never dreamed that a few millionaires i:n America would become the arr.ogant dk tators or bo-.: es of the. National Government. Nor did the builders of' the Republic believe that the time would come when the barons of high protecti-on would scorn the rights and wishes of the · people and tax them at every tum in their existence, in order ro enrich themselves· but that time has come . •

Ir . Speaker, I want some one · on tha-t side of the House o ' te:ll me the difference between the bold robber who holds you up on the highway and robs you of your money, and the government that · does the bidding of a hand of robbers who prescribe the conditions by which you shall come and surrender your money? I will tell you the difference: One takes his · chances and runs the risk of losing his own life in his efforts ta rob others, while the other gang uses governmental machinery to. hold up and plunder the citizen and in the name of law commits its crime against hUIDanity.

Their patriotism is measured by the size of the fortunes that you permit them to filch from the American consumers. The stars on the flag resemble dollar marks to them, and the stripes represent the special favors that they enjoy at the hands of a government controlled b.y the Republican party .

The Republican party regards the presence of a few money kings as evidence of America's prosperity; but not so. These men are tfie product of governmental favoritism, the creatures of unjust tariff taxation. . The laws that made them millionaires have robbed millions of people of the necessities o:f life.

Brrt,. Mr. Speaker, in spite of subsidized newspapers, that keep the truth from the people; in spite o:f1 the disgusting . a-ri:stocracy <!l{ the dollar, that controls · the Government through the Republican . party, we. shall continue: to proclaim that the comfort, the happiness, and well-being of the American citizen is the surest sigh o"t. genuine prosperity, the hi . highest end a.nd aim of constitu.­ tional government . [ Applause on the Democratic side. }

Mr . C O X e:f Indiana . Mr. Speaker, the Ways and Means Committee reported the tariff bill to Congress on the 18th of March, 1909, and it passed the House on the 9th day of April, 1909. The Constitution provides that "all bills for raising revenue must originate in the House,” and th.at "Congress shall have the power to lay and collect taxes, duties, imposts, and excises, but an: duties, imposts, and excises shall be uniform throughout the United States;" and it further provides that "Representatives and direct taxes shall be apportioned among the several States according to the respective numbers," and that "no capitation or other direct tax shall be laid unle s in proportion to the population of the States." The constitutional power of Congress to tax the people for the support of the Government is complete and plenary, the only restraint found in it relating to the taxing power of Congress is that " Congress is for ­ bidden to impose an e:xport tax. upon any article exported from any State." - l\fr . Speaker, the two systems of raising revenue for the support of the Government ip: ordinary times of peace have been a duty upon foreign manufactured goods imported into this country, together with an internal-re-venue tax upon liquors, cigars, tobacco, and so forth. In ordina:ry times of peace these two systems of raising revenue to meet the required expendi ­ tures · ot the Government have b-een found adequate, but ili. times of war, or even: in times of' peace when the appropriations of the Government have been exorbitant, the Government has resorted fo other systems o! taxation . It finds itself to-day compelled to resort to some other system of taxation than a tax upon imports and an internal - revenue tax for the purpose of raising money to meet its required expenditures .

Tax of any kind is always burdensome to the people, no matter in what form it may be imposed, or- in what guise it may be enacted into law-no matter if it be a direct tax upon property, as mo t,. if not all the States-, have; or an indirect tax, such as a duty upon goods imported into this country; or an internal ­ revenue tax, . it' is a burden just the same But the people, if treated fairly, with uniform taxation 1 readily yield this: power to the Government for the- protection which the Government gives in return to tile- people.

People heretofore have been more: concerned with taxation in their re pecttve States than they have with tax. imposed by the Federal Government. With the ' former they come in direct con ­ tact. This tax. is usually measured to them by the county · treas ­ urer or the gatherer of the. tax, and is alwa:ys measured in dol ­ lars a.nd cents- . Tu amount it is :fixed, definite-, and certain _ Not so with any system o:t indirect taxation. This tax is paid by the consumer indirectly · upon the amount of good consumed by him, regardless of his: ability to pay . This kind of tax is a tax upon consumption, and not upon either property 01· financial ability to pay the tax Mr. Sp-eake:r, a tax upon consumpti-on is a deeeptive tax ~ for fu-e- reason that the consumer of the com ­ modity is always unable to tell how much duty there is on it which has gone to the support of his . Government, or how much has: gone to the - support and maintenance of the manufacturers and trusts; and by reason of the blindness connected with its payment the consum-e-:r has continued to pay it; but in later years the ever - continued increase of the cost of the necessaries of life has caused an outcry by a large part of the mass of the people, and this outcry upon. their part forced the Republican party to declare in its : platform fo--:r a revision of the tariff and later the con-vening of Congress, for the purpose of redeeming the anteelection pledges- made by the Republican party.

When Congress entered upon this task, it was confronted with several questions. It was confronted with an enormous deficit in the Treasury, together with a demand on the part of the masses . of the · people, backed in their demand by th.e Republican party’s platform and the. promi es o:f President Taft for a downward revision of the tariff, so as to relieve them of some of the burdens imposed upon them under the Dingley bill ; and with a demand on the part of the high priests of protec ­ tion that they be not molested in their high and lofty citadel , from which the great captains of industry for the past twelve ye n. rs have continued to issue ord-e-rs to the great mass of people, and to harmonize an these conflicting interests the Republican party has been laboring long and late. That it will sati fy the · high priests of protection there is: no doubt; that it wi11 fail to satisfy the masses of the people there is · no doubt; th:it it wm not raise enough revenue by imposing . a duty upon imports for the support of the Government there is no doubt. Since July, 1908-, _ there has been a constantly gr-owing deficit in the Treasury of · the United States, until to-day it reaches the enormous · sum of $96,199',355.90 . - To frame a. ta.riff bill giving t'<» the trusfbarons all they wanted . and fur.tm the pledges made to the people, and, at the same time, between these two conflicting interests to raise revenue to supply the growing deficit in the Treasury and to meet the . future necessities of the Government has indeed been a herculean task for the party in power. Mr. PAYNE, in explanation of the bill, said:

Now the question of revenues under this bill is a serious question, and yet it is not so serious · as it would appear at first blush. It is true we had a big deficit on the 1st o:t July last for the previous year, but we had had a big depression in business ; importations halted, revenues bad been cut down, and when that continued during the fiscal year of 1909 down to the present time, showing a deficiency o! $87,000,- 000, it looked like a difficult task to provide sufficient revenue for the expenditures of the Government.

The appropriations made by the second session of the Sixtieth Congress for the year ending June 30, 1910, were $1,044,401,- 857 .12, and the estimated revenue out of which this appropriation was to be made from all sources-customs duties, internalrevenue tax, and so forth-is only $852,340,712. It is an easy matter to observe that under the ordinary system of raising money for the support of the Government, instead of the Treasury deficit being wiped out it will be largely increased by the end of the fiscal year June 30, 1910, unless some other system is devised for the purpose of raising revenue. In my judgment the time has come when one of two things must occur-either reduce public expenditures to a safe and sane basis, or devise some other means of raising the revenue for . the support of the Government than the means now in force. It was apparent to the framers of the present tariff' bill that it would not raise revenue to meet the expenditures of the Government, and in order to aid in supplying this deficiency the bill when it passed the House contained a provision for an inheritance tax, and from this item alone the chairman of the committee estimated century. that a revenue of $20,000,000 per year would be raised. And the Senate having substituted a tax upon the net incomes of corporations for an inheritance tax, and this at the instance of President Taft, again showed the doubt in the minds of the Senate and the President that the bill will not raise the required amount of revenue. Both of these steps were taken in aid of the Treasury, and to stave off the constantly growing but popular demand for an income tax.

In my judgment, the· expenditures could be materially reduced; and while we are promised a reduction of $10,000,000 in the navy and $20,000,000 in - the army for next year, will we get it? It is a fact that no one of the departments of the Government willingly yields any of its power, and its main power has consisted in seeing how much of the people's money it could appropriate and expend every year. With the navy appropriations leaping from the small sum of $33,034,234.19 in 1898 to $137,000,000 in 1909, and with the appropriations for the army growing from $23,129,334.30 in 1898 to $110,000,000 m 1909, and with the appropriations in all other departments of the Government keeping pace with these two, can we cajole ourselves into believing that of a sudden we will about face, retrench, and reform by having a marked reduction of public expenditures in the Government? Let us hope so; but, for one, I fear we will not have it. So long as we hold the Philippine Islands, together with our other colonial possessions, and maintain a suzerainty over Cuba and remit to China $12,000,000 as our part of the indemnity' growing out of the Boxer uprising, I see but little hope for permanent retrenchment in the public expenditures of the people's money . . Since it is evident that the Government is in need of revenue, and equally evident that our system of raising revenue is totally inadequate to meet the demands of the Government, and since some other system of raising revenue must be devised, the question is: What shall it be? Evidently not an inheritance tax, because the Senate and the President both have turned their backs upon this righteous measure, although President Taft at one time was heartily in favor of it. Evidently not an income tax, although on the 19th day of August, 1907, at Columbus, .Ohio, the President, while making a speech, said :

In times of great national need, however, an income tax would be of great assistance in furnishing means to carry on the Government, and it is not free from doubt how the Supreme Court, with changed membership would view a new income-tax law under such conditions. The court ~as nearly evenly divided in the last case, and during the civil war great sums were collected by an income tax without judicial interferen'Ce and, it was then supposed, with~ the federal pow;er. Whenev e r the government revenues need an mcrease or readJustment, I should strongly favor a graduated i!'.lhel;'itance tax 1 and, if necess~ry for the revenue, a change in the Constitut10n authorizing a federal rncome tax, with all the incidental influence of both measures to lessen the motive for accumulation.

But Mr. Speaker, this is not all. On the 28th of July, 1908, after Mr. Taft was nominated for the Presidency, in his speech of acceptance, at Cincinnati, on this subject he said:

The Democratic platform demands two constitutional amendments, one providing for an income tax and the other for the election of Senators by the . people. In my judgment, an amendment to the Constitution for an income tax is not necessary. I · believe that an income tax, when the protective system of ' customs and the internal revenue shall not furnish income enough for goyernmental needs, can and should be devised which, under the decision of the Supreme Court, wiH conform to · the Constitution.

Mr. Speaker, when it was an assured fact that the BaileyCummins income-tax amendment would pass the Senate and with the equally assured fact that it would pass the House, Mr. Taft suddenly sent to Congress a message asking that a tax of 2 per cent be imposed upon the net incomes of corporations. Mr. Speaker. while I will support this measure, I must confess that I do not do it with the alacrity and force with which I would have gladly supported an income tax. Taxation, nt its minimum, is always a burden upon any people, but I believe this burden should be uniformly distributed throughout the country, resting upon the shoulders of all, without discrimination against some and in favor of others, and this is exactly what will be the result of a tax upon the net incomes of all corporations. It will impose a tax upon a corporation and at the same time exempt the individual or the copart;nership engaged in the same business along by the side of the corporation. This in itself is unfair, but nearly all the large corporationsthe trusts, the railroads, and the express companies-are bonded for a large part of their wealth. The railroads alone, being bonded for upward of $6,000,000,000, and the trusts for at least an equal sum, these sums representing one-ninth of the total wealth of the country, under this system of taxation all this immense wealth will escape the burden, although these bonds are gold-bearing interest bonds, drawing from 4 to 6 per cent, payable from 1913 down to the end of the present But, Mr. Speaker, this is not all. There are thousands of little corporations scattered over the country having no bonded debt at all, their property being . represented by the stock of the corporation, and this class of corporations will have to pay full tax upon their net incomes, having no bonded debt to reduce their net earnings.

But this is not all. No one for a moment doubts but what the tax will in the end be largely shifted from the shoulders of the corporations to the shoulders of the consumers. The railroads and the express companies will raise their charges, so that in the end people using these public corporations will pay the tax. Likewise the same will be true as to the products of all the great trusts of the country. The price of manufactured goods will be increased to the amount of the tax, and the consumer in the end will pay the bill.

But, Mr. Speaker, this is true of any tax the burden of which can be shifted from one to the other. In the last analysis of this . kind of tax the consumer or the user of the article must ultimately pay it. It is true of a tax · raised by means of a duty upon imports, where the burden of the tax is shifted directly from the shoulder of the importer of the goods to the purchaser of the same, by having the cost of the duty added to the cost of the articles paid by the purchaser in the end. But, Mr. Speaker, for more than one hundred and seventeen years we have been accustomed to raising revenue in this country by means of a duty imposed upon imported goods until it has become a part of the traditions of our people, so that in this day it will be difficult to completely turn them from this old-time idea of raising revenue. But, sir, in my judgment, there is a much easier way of raising revenue than by imposing a tax upon net incomes of corporations or by imposing snch enormous revenue duties upon imports. This system will not be found in a tax upon the net incomes of corporations; it can be partially found in an inheritance tax, and can be completely found in a graduated income tax . Mr. Speaker, here man and corporation will both stand upon an equality; here man and corporation will pay upon his income, whether derived by his own individual exertion or aided by the passage of class legislation.

Whenever man alone or a combination of men take advantage of the laws of nature or the laws of man, and out of this advantage create wealth beyond the dreams of avarice, in my opinion this wealth should be subjected to taxation. But, say its enemies, it is an inquisitorial tax; it opens the door and pries into the private affairs of life. So does any other tax. It is no more inquisitorial, makes no more inquiries into life, than does the direct property tax in the States upon real and personal property. What is the tax in the States both upon real and personal property but an inquisitorial tax? When the township or county assessor takes an inventory of the people's property he compels them, unless they commit perjury, to disclose all the property they have subject to taxation. But, again, they say that this is a tax upon thrift. So be it. And so is all direct taxation in the States a · tax upon thrift; no more, no less. The man in the States · who is industrious and thrifty in the accumu- · lation of property must and does pay more tax than his neighbor who is less thrifty and less industrious; yet this system of taxa­ · tion has worked admirably from the foundation of the Government down to the present time. On kindred principles would · not an income tax for the Government work the same?

Senator John Sherman, of Ohio, on the 22d day of June, 1870, while in the Senate, speaking against the repeal of the then income-tax law, · said, in part: . They have declared it to be invidious. Well, sir, all taxes are invidious. They say it is inquisitorial. Take the ordinary taxes levied in the State of Ohio, and in all the States in this country, by the Statutes at Large. Do they not require the assessor to go around and ascertain the personal property of every citizen? Is that not inquisitorial? • * • Every tax . x is inquisitorial, and the least inquisitorial of all is the income tax. • * •

You go to the homestead of a widow who has nothing but a roof to cover her head, and you levy your tax upon the entire value of the homestead and make her pay it, . although she may have to sell the last shoat, the last chicken, th-e last egg to pay it. So, also, you levy on the properly of the rich. Is not that nn unjust tax? Certainly it is ; and you €an not levy tax: so as to make them just in all respects. • • • · .

'.rhe income tax · is simply an assessment upon a man according to his ability to pay-according to his annual gains. What tax could be more just in theory? . When you come. down to the solid basis of evenhanded justice. you will find that writers on political economy, as well as our own sentiments of what is · just and right, teach us that a man ought to pay taxes according to his income and in · no other way. Property is not the proper test of taxes, because, as I said before, the property of the poor may be levied upon to make up the deficienci-es in the property of the rich; unproductive property that yields no rent and no income may be compelled to pay the same rate of taxation as property which yields an annual rental of from 10 to 15 per cent. * • * . · • • • If you now repeal the tax on incomes, you have to continue the taxes on the consumption of the poor. You have now the choiCe between levying a . little. bit of a tax on property, which, after all, will .only yield us about 6 per cen.t of our annual income, and piling the whole of this taxation, with its accumulation of the past, upon consumption, and not upon property.

Senator Morton, of Indiana, in the second session of the Fortyfirst Congress, speaking against the repeal of the income tax, said:

Then there is the argument of demoralization. These people who have to pay income tax: insist that they will be demoralized; they do not want to be demoralized, but they know they will be ! Therefore we must exempt them for fear they will be demoralized !

All this argument about demoralization, therefore, is just as applicable to the state taxes as to federal-income tax; and if it is a good argument for abolishing one it is a good . argument for abolishing the other. I have no respect for that argument, not a bit; I have heard it urged for years now against -the income tax, but a moment's · examination will sati"Sfy anybody that if it is a good argument at all it is good against any tax except a mere tax on real estate, which is visible to the assessor, and which he assesses without consulting the owner.

What honest objection ls there to letting his neighbors know his real condition? If he conceals his real condition, it is ipso facto a fraud for some purpose, though not one of those frauds of which the law can take cognizance. He may hold out the impression that be is doing well when he is not, and get a false credit. Does the law, or · do morals require that he shall have the right to do that? Certainly not. No honest man, then, need be afraid of the inquisitorial feature. • • • • • • The income tax: is, of all others, the most just and equitable, because it is the truest measure that has yet been found of the productive property of the country. • • •

But, sir, when you tax a man on his income, it is because his property is productive. .He pays out of his abundance because he has got the abundance. If to pay his income tax: is a misfortune, It ls because he has the misfortune to have the income upon which It is paid. • • •

In the Dingley bill there were upward of 4,000 different articles upon the dutiable list, with an average ad valorem rate of about 45 per cent, which means that to the cost of every $100 worth of goods bought and consumed in this country $45 in the way of duty would be added. Under the Payne bill there will be as many goods upon the dutiable list as there were under the Dingley bill, with an average ad valorem rate equal to, if not greater, than the rate in tl;le Dingley bill. In the desperate attempt to raise money by this system the people are to-day groaning under a system of high taxation upon the necessaries of life and are casting about to find some relief against these unequal burdens. How can they do it? My answer is, By the adoption of an income tax. Who has stood for an income tax in the past? Sµch master minds as Senators Sherman and Morton, from whom I have so liberally quoted; And, later, no less a personage than President Roosevelt in many public speeches and writings has stood for an income tax. In his annual message to the second session of the Fifty-ninth Congress he said, in speaking of this subject:

The National Government has long derived its chief revenue from a _ tariff on imports and from an internal or excise tax. In addition to these there is every reason why, when our next system of taxation is · revised, the National Government should impose a. graduated inherit­ . ance tax and, if possible, a ~raduated income tax. The man of great · wealth owes a peculiar obligation to the state, because he derive~ special advantages from the mere existence of . government. Not only should he recognize this obligation in the way he leads his daily life and in the way he earns and spends his money, but it should also be recognized by the way in which he pays for the protection the state gives him. • • • Whenever we as a people undertake to remodel our taxation system along the lines suggested, we must make it clear beyond peradventure that our aim is to distribute the burden of eupporting the Government more equitably than at present; that we intend to treat rich man and poor man on a basis of absolute equality; and that we regard it as equally fatal to true democracy to do or permit injustice to one as to do or permit injustice to the other. • • • In its inc-idents and apart from the main purpose of raising revenue, an income tax stands on an entirely different footing from an inheritance tax, because it involves no question of perpetuation of fortunes swollen to an unhealthy size. The question is, in its essence, a question of the proper adjustment of burdens to benefits. As the law now stands it is undoubtedly difficult to devise a national income tax which shall be constitutional, but whether it is absolutely possible is ~other question, and if possible it is most certainly desirable.

The Democratic party in 1894 passed an income-tax law, which was held by a bare majority of one in 1895 to be unconstitutional From that time down to the present the Democratic party has never faltered in its demand for an income t x. And no man in the United States has done · as much to mold sentiment in favor of · this tax as W. J. Bryan. The people are aroused to-day along this line as never before. Under a graduated income tax enough revenue could be raised to practically · support the Government without oppressing anyone. For more than one hundred years England has had an income tax in some form or other: For this year the British Government will collect $165,103,000 revenue by means of an income tax, and yet she has a population of only 44,500,000, and this tax it derives upon a total asse sment amounting to $476,404,000, divided as follows : An income tax on 58,049 firms ; · an income tax on 33,508 public companies; an income tax on 10,639 - local authorities. And out of all her total assessments for income-tax purposes there were only 20 individuals and 92 firms whose incomes were over $250,000 per year. Under her graduated system of income tax all incomes over and above $800 per year are assessed, the per cent of assessment increasing as the incomes of corporations or individuals continue to increase. In wealth the United States outstrips every nation upon the earth. Our population in continental United States in round numbers is to-day 90,D00,000, more than twice that of Great Britain. Our total value of property -to-day is upward of one hundred and ten billions-more than twice ' that of Great Britain, two and one-half times that of France, and about two and three-fourths that of Germany. With the Bailey-Cummins amendment exempting all yearly incomes below $5,000, in my judgment, we would raise twice the amount of revenue that England raises becam:.aa of our superior wealth and population. The . Washington Post recently published a list of a few of the larger corporations which would be taxed upon their net incomes, showing the amount of revenue the Government would receive by imposing a 2 per cent tax upon the net incomes of these corporations, which is as follows: 1007. 1908.

CORPORATIONS.

Adams Express CompanY---------------------------------- ---------- $20,poo Allis-Chalmers Company ______ ----- -- ----- -- ----- ------- ____ $25,000 50,000 American Agricultural Chemical Company_________________ 43,000 43,000 Amalgamated Copper Company____________________________ 280,000 133,000 American Beet Sugar CompanY--------------------------- 10,000 20,000 American Can CompanY---------------------·------------ 53,000 54,000 American Car and Foundry CompanY---------·----------· 162,000 164,000 American Cigar OompanY---------·---- - ------------------- · 37,000 American Cotton Oil OompanY---------------------------- 52,000 30,000 American Hide and Leather CompanY---------------------· 5,400 260 American Locomotive CompanY---------------------------- 135,000 99,000 American Shipbuilding Company. 32,000 26,000 American Smelting and R.efining Company_______________ 230,000 152,000 American Sugar Refining CompanY---------------------·-- · loo,000 125 000 American Telegraph and Telephone ComJ)1inY-------------- 650,000 110:000 American Tobacco CompanY----------------------------- 540,000 574,000 American Woolen ComvanY-----------------------------·- €8,COO 25 000 Anaconda Copper Company___________________________ 184,000 u:ooo Batopilas Mining CompanY---·----------------------------- 2,900 2,900 Brooklyn Union Ga Company_________________________ 4:8,000 · 54 000 Butte Coalition Mining Company________________________ _ 1,400 28:000 Cambria Steel CompanY---------------------------------· 91,000 30,000 Calumet and Arizona Mining CompanY------------------- · 70,000 22,000 Central Leather CompanY---------------------------------- 46,000 54,000 Chicago Telephone CompanY----J-----------------------· 35,000 4.0,000 Colorado Fuel and Iron Company.________________________ 59,000 57,000 Consolidated Gas CompanY----------------------··------·- · 32,000 Consolidation Coal CompanY------------------------- · 33,000 19,000 Crucible Steel CompanY--------------------------------- 53,000 Corn Products Refining CompanY---------------·---------- 40,000 · 49,000 Diamond Match Company_________________________________ 32,000 32,000 Distillers' Security Corporation.. ______ ..:________________ 'l0,000 26,000 Dominion Coal Company __ ·------------------------------- 42,000 53,000 Du Pont Powder ComJ>anY-------------------------------- 78,000 98,000 Federal Mining ~d Smelting-Company____________________ 50,000 21,000

1907.

COBPORATIONS-continued.

General Electric Oompan:V---------------------------------­ $226,000 $213,000 General General Asphalt Cb ' emlcal CompanY------------------- Comvany __ ; __ :_ __________________________ -------------- _ 17,000 21,000 International Harvester OompanY------ ----- -------------- · 160,000 177,000 International Paper Company _ _ --------------------------- - 32,000 International Mercantile Marine Company _ ____ ____ ______ _ _ 140,000 Lehigh Coal and Navigation Company ____________________ , 47,000 Massachusetts Gas Company _________ __ ___________________ _

32.000

Mexican Telegravh Company ___ ____ ------------ - -----------· 17,500 National National Biscuit Carbon Company_----------------------------- Company ________________________________ __ _ _ 79,000

19,000

National Lead Company __ ----------------- · - --------------­ 79,000 North American CompanY---------------------------------· 28,000 Pacific Mail Steamship CompanY----------~---------------­ ll,000 Pressed Steel Car CompanY------------ --- ---- ----- ------ - 50,000 Peovle's Gaslight and Coke Comvany _ ____________________ _ 103,000 Pittsburg Ooal Company ___ -------------------------------- 80,000 Philadelphia Electric Comvany __ ------ _ ------ ------- ------­ 18,000 Pittsburg Pi ttsburg Brewing Plate Glass ComvanY------------ Company __ ___________________ ------------------- ______ _ · 44 , 000

.(4,000

Pullman CompanY------------------------------------- ____ _ 280,000 195,000 Qoaker Oats Comi:>&nY-- - ---------- ----------- -------- --- · - -· 24,000 Railway Republic Iron Steel and Spring Steel CompanY-,.--------- Company _________________________ ----------------- _ 132,000 46,000 Sloss-Sheffield Steel a nd Iron OompanY-------------------· 33,000 Un1on Bag and Paver ComvanY---------------- - ----------· H,000 United States Rubber ComvanY --------------------- -- ---- · 90,000 United States Steel Corporation__ ______ _ __________________ _ 1,000,000 Virginia-Carolina Chemical Company _________ _ ______ __ __ _ 80,000 Western Union Telecra . ph CompanY---------------- - ------ · 98,000 Wolverine Oopper CompanY----- --------------------- - -·- __ _ 26,000

RAILROADS.

Atchison, Topeka and Santa Fe-------- - ------------------ · 420,000 Atlantic Coast Line------------ - ------ __________ --- ________ _ 62,000 Big Four---------------~------- - --- . --- ---- ---- --------- -- - - 39,000 Boston and Maine ______ .: ___________________ ---------------- - 52,000 Brooklyn Rapid Transit_: __ -~------------------ _____ .• _. __ _ 40,000 Baltimore and Ohio _____ _ _________ ------------~------------- 3~9 , 000 202,000 Central Railroad o:f New JerseY---------------------------­ 115,000 Chesapeake and Ohio------------------------ ~ -------------- 68 , 000 Chicago and Alton _______ _ _ ________ ; _____ _ ___ ----_------- __ . S6,000 Cbicago anc t Northwestern__ _______________________________ . 315,000 Chicago, Burlington and Quincy---------------------- ___ _ _ 176,000 11~.000 Chicago, Milwaukee and St. PanL------------------------ · 268,000 247 ,000 Colorado and Southern__ __________________ ----------------- · 42 000 Delaware and Hudson------------------------------------- 128:000 105,000 Delaware, Lackawanna and Western _______________ _ _____ _ 200,000 213,000 Denver and Rio Gra.nde..-------------------------------~---­ 50,000 Detroit United Railways--------------------- -- -----_------ · 22.000 Erie------------------------------ ______ ___ _____ ___________ - · 83,000 Great Northern ________ .. __ ---------- __________ ------------- 350,000 300,000 Hocking VnlleY--------------- --- - --- - --- -- -- -- __ ---- __ ---- _ _ 36,000 . 27 000 Illinois OentraL---------------------- ______________ -------- 233,000 100:000 Iowa OentraL----------- - --------------------------------- 9 , 000 Kansas City Railway and Light--------------------------- 18.000 Kansas City Southern_:_ _______________ ·------------------ - 49,000 Lehigh Valley _____ - ----- -· --------------- --- _____________ . ___ _ 132,000 Louisville a.nd Nashville ___________________________________ _ 129,000 Missouri, Kansas and Texas_ ____________________________ _ 74,000 Missouri Pacific.. ______ --- --- ------------------ _____________ . 133,000 Montreal Street Railway __________________________________ _ 20,000 New York, New Ham pshire and Hartford.---------------· 178,000 105,000 New York, Ontario and Western ______ _: ___________________ _ 33,000 New York CentraL----------------------------------------- 220,000 180,000 Nickel Plate ____________________ - - -- -- -- - ------· ---- ---- ____ _ 26,000 Norfolk and Western _____________________________ _________ _ 140 ,000 :Northern Pacific.. ________________________ - - -- -- ____________ _ 468 , 000 400,000 Pitt s burg, Cincinnati, Chicago and St. Louis------------ 75,000 Pennsylvania------------------------------ -- -- -- _. ---- _____ . 600,000 490,000 Rock Reading Island--------------~-. ___ ____ _________________________________ - -- " - -- - . - - - -- - - --- - .. _ __________ - __ -- -- ___ _ _ 1 75 ,000 16 5,000 168,000 Southern Railway _______ ------ - --. _ __ ______ -~ _____________ _ 46,000 Southern Paci fic --------- - ------------------- __________ . ___ _ 640,000 385,000 St. Loui s and San Fra nciscO ---- -- ---------------- -- ------ - 95,000 Texas and Pa cifi c ______________________ -- -- --- ------ -- ------ 56 000 Twin Union City Pacific Rapid ______________________________________________ TransiL---------------------------------- - · 31:000

723,000

It will be observed that from these items alone an mous amount of re ven ue will be raised under the corporation tax. An amount two or three times as large would be raised und e r a graduated income tax .

It is not my intention to belittle wealth, but, on the hand, I believe it should be the duty of all to uphold it where it is honestly procured. The idea that men like Carnegie, now the holder of more than $300,000,000 worth of the bonds of the United States steel trust, escape federal taxation indeed absurd. A few days ago the public was treated to spectacle in New York, in what was known as the famous "Gould divorce case," where Mr. George Gould testified the annual share of his brother Howard in their father's tate was approximately $800,~JO; and then, to realize that of these enormous fortunes are escaping their just and pro portionate share of taxation while the people themselves staggering under our present system of indirect taxation, it no wonder to me they cry out for relief. If it be the determinr.

tion of the so-called "business interests" in this · country ' to 1908. - maintain an enormous navy at a cost of hundreds of millions -- of dollars annually, as · well as an army, to protect and defend their various business interests, I insist that this part of the wealth of the country ought to stand its proportionate 34",000 share of taxation, and I know of no way to compel them to 20,000 do it as justly and equitably as an income tax. [Loud applause.]

32,000 Mr. SHARP. Mr. Speaker, it is with some reluctance that I 40,000 shall cast my vote for this measure. Though I have always 35,000 been, and am now, in favor of a graduated income tax-for it is 12,000 82,000 good Democratic as well as sound economic doctrine-yet the 16,000 circumstances under which this resolution comes to the House 79,000 smacks so much of subterfuge and disingenuous motives that a 29,000 62D vote for it seemingly indorses the ruse. Acceptable as such a 3,000 method of taxation is conceded to be, I believe, by a large mall0,000 jority of the Members in this House, yet it is · difficult to dissoci­ 19,000 30,000 ate from its merits the fact that had those Senators by whose 25,000 vote this resolution comes to the House been sincerely in favor 26,000 of such a tax we would be to-day voting for its incorporation in 19,000 the Payne tariff bill, instead of sending it out in the form of a 20,000 constitutional amendment upon its hazardous journey of success­ 80,000 23,000 fully running the gantlet of three-fourths of the state legisla­ 18,000 tures of the Union . Indeed, the situation confronting us is a 71,000 most unusual one. 9'20,000 Since Congress was convened in special session last March - 32,000 70,000 to consider tariff legislation the changes in tlle various plans ll,000 for raising the revenue have been kaleidoscopic and at times most mystifying. When the bill left this House, it had appended to it a provision for the inheritance tax. Soon after its admis- 210,000 sion to the Senate the expert tariff surgeons of that august body 55,000 removed this appendix, only to have another complication to H,OOO deal with in the form of a corporation tax. The already 35,000 troubled situation over in that body was not made more pleas ­ ing by a vigorous presentation of an income-tax provision, most 55,000 96,000 ably and persistently ad v ocated for many days by the so-called 26,000 “progressive” wing of the dominant party, backed by the 272,000 almost-solid Democracy. To appease this sentiment and at the same time prevent a revolt threatening the very passage of the 43,000 bill itself, the resolution which we now have before us, providing for a constitutional amendment, was finally passed by the 63 , 000 Senate, in return for which the · proposition to tax corporate 20,000 earnings was to have easy sailing. H,000 And now comes the harrowing rumor that possibly this corpo"ration tax, the panacea for preventing vanishing revenues may be rejected by the conferees-a thing to be de vou tly wished 4,000 for by a very large element of both political parties. Surely, 17,000 32 - ,000 if future events justify this rumor, "for ways that are dark 120,000 and tricks that are vain" the Senate tariff jugglers have more 56,000 than outdone the "heathen Chinee." 16,000 60,000 I am · aware that the national platform of the Democratic 22,000 party has declared in favor of submitting an income-tax constitutional amendment and that on e law of Congress imposing 30,000 such a tax has been declared unconstitutional by our highest 20,000 court in a close deci s ion; but by no less an authority than the ll5.000 President himself, at one time looked u pon as the best-qualified 59,000 man in the country for the position of Chief Justice of that court, has it been declared . red that, in his opinion, a law providing for 94, 000 an income tax might now be so framed as to be declared con­ 8,000 stitutional . More than this, in his speeches at different times, the President has de cla red in favor of the · wisdom and justice 10,000 of an income tax in one form or another. The sam e sentiment 37,000 23,000 was expressed by ex-President Roo seve lt in his me sage of 715,000 December, 1906.

- Opponents of the measure seem to forget that such an incometax· law was in existence in the United States during the war enor- and for a short time thereafter; that many millions of dollars were collected under it, and that its constitutionality was never questioned, or at least there was no judicial interference with . its operation. The imposition of an income tax for providing other re ven ues for the Government is not an experiment among nations, for, aside from our own experience during the rebellion, it has been tried for more than one hundred years in Great

Britain, and to-day in that country it yields more revenue than is any other one form of taxation. For the fiscal y ear ending a March 31, 1909, the revenue from the income tax in Great Britain and Ireland, , with a population of about half that of that the United States, amounted to $165.103,000, derived from net es- incomes of approximately $3 , 200,000,000. all The very recent report of Special Agent Charles M. Pepper to the Department of Commerce and Labor gives some interestare ing and instructive information concerning the income-tax law is of Great Britain. For the purpose of showing how the incomes I are there graded for taxation, let me quote from that report as follows, the various amounts being in English pounds sterling ($4.866): Number of Gross Grade of income. assess­ amount of ments. income. Not exceeding £160, but not exempt------------------- 318,570 Exceeding £160 and not exceeding £20() _______________ _ 237,775 Exceeding £200 and not exceeding £3()() _______________ _ 205,914 Exceeding £300 and not exceeding £~---------------­ 80,019 28,676,015 Exceeding £400 and not exceeding £500------"--------· 44,176 Exceeding £500 and not exceeding £600 _______________ _ 23,175 Exceeding £600 and not exceeding £700 _______________ _ 13,811 Exceeding £700 and not exceeding £800 _______________ _ 11,154 Exceeding £800 and not exceeding £9()() _______________ _ 6,350 Exceeding £900 and not exceeding £1,000 _____________ _ 8,758 Exceeding £1,000 and not exceeding £2,000------------ · 23,032 33,758,188 Exceeding £2,000 and not exceeding £3,000------------· 7,407 Exceeding £3,000 and not exceeding £4,000 ____________ , 3,803 Exceeding £4,000 and not exceeding £5,000------------· 2,533 11, fi60. 511 Exceeding £5,000 and not exceeding £10,000 _____ _ _____ , 4,831 34,909,69"2 Exceeding £10,000 and not exceeding £50,000 _________ _ 4,188 87,275,455 Exceeding £50,000_ -- ---- -- -------------- ----- - ------- --- 949

It will be noticed that' the incomes are carefully graded, beginning substantially with a difference of $500, then increasing to $1,000, and finally from $5,000 to $25,000 and more. The rates also of assessment, while not shown in the table, increase with the amount of income and also vary according to schedules involving different sources of income. Such a law has given the greatest satisfaction in Great Britain, and such a method of taxation carefully adjusted to meet the different conditions in this country should, in my judgment, be passed by Congress in connection with this tariff bill; if then declared tmconstitutional, provision could be made for adopting a constitutional amendment therefor.

So much has been said of the merits of an income-tax law that I will not attempt, in the brief . time allotted to me, to consider at length the advantages of this form of taxation. A few points in its favor, however, stand out boldly from all the others. One of the most salient is that, upon its very face, it places the burden of taxation most heavily upon those who are most able to bear it. Under our present system of raising revenue just the reverse is true, for a man may be a modern Crresus 'and yet he can wear but little more clothing or eat but little more than the humblest workingman. It is indeed proverbially true that the wealth of the poor man often consists in the size of his family; . and yet, under the provisions of this general tariff bill, not a boot or shoe, an article of clothing, a mouthful of food, or a bit of material, raw or manufactured, that goes into the construction of his house, or tools or farming implements but what is heavily taxed for the support of the Government. But the burden does not end here, for, under our various tax laws, it is notoriously true, for most obvious reasons, the man whose sole property consists often of his little homeand let me say that this class of industrious citizens comprises a very large majority of our people-pays very much more than his share of the taxes. The township or ward assessor may unable to find the secreted wealth of the rich or well-to-do but the little home with its patch of garden is altogether conspicuous . to escape the taxgatherer's notice.

Yet, as heavy as this direct burden of taxation seems to be, does not compare in amount to the indirect tax imposed the consumer who daily must pay tribute upon nearly article of food or clothing which he buys. James G. nearly twenty years ago, protesting against placing a duty hides, pointed out in a letter to William McKinley what meant in so many cents for each pair of boots and shoes worn the children of that great army of men who are least able stand the burden. Already the press is announcing through columns that the big dealers in clothing are preparing to an advance in the price of many articles affected by the sions of this bill. · ·

Some days ago the New York World gave out a list of returns upon the personal property of a score of that city's est people. If I remember correctly, none reached higher $5,000,000, while quite a large proportion were below a of a million dollars. Perhaps under the laws of the State New York the personal property of these citizens was honestly returned, but, · if common reports are true, the annual income alone of nearly all of those named exceeds the entire amount personal property so listed.

In defining the reason for the right of the Government to contributions in the form of taxes upon persons and property, Judge Cooley says :

The State demands and receives them (taxes) from the subjects of taxation within its jurisdiction that it may be enabled to carry effect its mandates and perform its manifold functions, and the pays from his property . the portion demanded, in order that by means thereof he may be secure in the enjoyment of the benefits of organized society. The justification of the demand is therefore found in the reciprocal duties of protection and support between the State and those who are subject to Its authority, and the exclusive sovereignty and jurisdiction of the State over all persons and property within its limits for governmental purposes. The person upon whom the demand is made, or whose property is taken, owes to the State a duty to do what shall be his just proportion toward the support of the Government, and the State is supposed to make adequate and full compensation in _ the .£22,Sil,lM protection which it gives to his life, liberty, and property, and in the 43,946,713 increase to the value of his possessions, by the use to which the money 62,105,397 contributed is applied. 22,509,034 The justness and fairness of these reasons for imposing taxes 13,094,196 have been universally recognized by the most enlightened gov­ 9,127,473 8,509,Sil ernments. Do they show good cause why incomes should not 5,'57,305 be taxed in proportion to their size? Is not the income of 8,552,798 a citizen made more secure and larger from the fact that " the 18,59'2,178 State is supposed to make adequate and full compensation in 13. 376. (81 tlie proteCtion which it gives to his life, liberty, and property, and in the increase to the value of his possessions? " There are thousands of instances of wealthy men who, owning little or no 174,174,323 real estate, which, because of being visible and tangible; is always first reached, yet enjoy very large incomes from investments which neither directly nor indirectly are listed for taxation. Is it fair that these men should bear no burden in meeting the expenses of maintaining the Government? -

There has been much said concerning the amount of revenue which could be realized from an inheritance tax or a tax upon corporate earnings, the amounts being variously estimated at from $25,000,000 to $50,000,000, and yet a modest income taxexempting, if you please, all incomes below $5,000--would, I believe, - easily yield an annual revenue of more than $100,000,000. But, sir, as much as I am in favor of a well-adjusted income tax and the adoption of this resolution if necessary, yet I must confess I have but little faith that this proposed amendment will succeed in being incorporated in the Constitution. Possibly by that other method of amending the Constitution provided for in Article Y, whereby state conventions could be called for that purpose, this proposition would carry; but the securing of threefourths of the state legislatures in its favor will, in my judgment, be too much to hope for, at least for many years to come.

What should be discussed and determined as a business and economic proposition, along wholly nonpartisan lines, will be made a partisan issue, with the chances of success all in favor of the money power and machine tactics. Already one of our great party leaders has issued a call to arms among its supporters, and if it has not in the past become so prominent as a party issue, it is now bound to be so. Commendable and sincere as are the motives that prompted such call, yet therein lies its chief danger of defeat. Not but once since the election of 1872 has either party been able to control three-fourths of the state legislatures; and it is not at all probable that, with the state­ party so evenly divided as at present, the opponents of an inthat come tax will not succeed in preventing a ratification of the proposed amendment by the legislatures of more than a dozen

States-all that are required to defeat it.

In fact, the arguments already advanced upon the floor of be this House by the opponents of this measure serve to show, by man, unmistakable signs, the difficulties that · will later on be put in too its path. Perhaps one of the keenest and most learned speeches made against it came this afternoon from the lips of the gentle- man from Massachusetts [Mr. McCALL], whose arguments will upon be repeated at the proper time from the house tops in his State every by those who oppose it. Indeed, the wide latitude of the power Blaine, of taxation, as given · by the terms of the proposed amendment;

on will serve as a specious reason, at least, for rejecting it. While it the various provisions of the Constitution were under discussion by at the time of its adoption, no one subject was more thoroughly to discussed or aroused more interest than that of relative repreits sentation by the different States and the power of taxation. make Each State was very jealous of the power ceded to its neighborprovi- ing State, and as late as the year 1832 the State of South Carolina practically attempted to secede from the Union on account the of "the- system of protecting duties lately adopted by the Fedrich­ eral Government." The final reason, among a number of than others, for such action, as cited by that State's legislature, could quarter have so well been incorporated into the speeches of not a few of Members on this floor who recently so eloquently pleaded for the tariff duty upon the favorite products of their own States, that the arguments then used may well be put in the deadly parof allel column with those made three-fourths of a century later. Let me take the liberty of quoting in full the final summary of levy the reasons of those statesmen why their State had been so grievously discriminated against, and which required the power of President Jackson's famous message to combat:

Finally, because South Carolina, from her climate, situation, and peinto culiar institutions, is, and must ever continue to be, wholly dependent citizen upon agriculture and commerce, not only for her prosperity, but for her very existence as a State-the blessings by which divine Providence seems to have designed to compensate for the great disadvantages under which she suffers in other respects-are among the very few that can be cultivated with any profit by slave labor, and if by the loss of her foreign commerce these products should be confined to an inadequate market, the fate of this fertile State would be poverty and utter desolation; her citizens, in despair, would emigrate to more fortunate regions, and the whole frame and constitution of her civil polity be impaired and deranged, If not dissolved entirely.

How long will it take the opponent:;; of this resolution residing in the State of Connecticut to take up the words of opposition that came to-day from their able Representative [Mr. HILL], who inadvertently, in giving as a reason why he opposed the doctrine of income tax, stated that under an inheritance tax his little State had contributed more than the · combined revenues so realized from 15 or 20 States, including my own great State of Ohio, yet thus furnished the unwilling evidence that his people were enabled to become possessed of such great wealth through the unequal and oppressive operation of the high tariff which for so long a time in the past has showered wealth into their coffers by levying unwelcome tribute upon the less fortunate citizens of the other States which he enumerated? But if opposition to this amendment is to be made in the wealthy New England States, what will be its reception in some of the western - mining States where, according to a frank admission made to me within the past few days by one of its ablest Representatives in this House, no poor man, however able, could hope to be elected to the United States Senate? In some of these States from a dozen to twenty members of the legislature may effectually block the ratification by their State of this amendment. With such difficulties in its way, with the power of organized wealth back of it, with small States treated as units having exactly the same power and influence as the biggest States, can we reasonably hope for this proposed sixteenth amendment to our Constitution to become ratified? If this question could be submitted to the people of the United States upon a popular vote, I have no doubt of its carrying by an overwhelming majority; but, unfortunately, it can not be so submitted. _

In conclusion, for some of the reasons I have stated, let me appeal to this House that, before it is too late, we may by our action incorporate in this bill a straightout provision for an income tax, instructing our conferees to stand firmly for its adoption, taking the chances of its passing a favorable decision by the courts. No one act that the Members of this body could do would reflect more credit upon the House or give more genuine satisfaction to · the American people who, groaning under the present oppressive burdens, with no relief in sight from the · promised downward revision, earnestly desire, as I believe, the adoption of an income-tax law.

The time has surely passed when the arguments of those who advocate a change in our system of national taxation whereby an equal and more just distribution of the burdens of taxation · may be made can be dismissed as the clamorings of demagogues and as attacks upon wealth. I have always favored conservative rather than radical policies, and trust I am not one of those who undervalue the worth to state and society of the successful men who are popularly designated as those who "do things," but I am just as strongly opposed to any policy of protection or exemption from taxation that each year automatically tends to make the rich man richer and the poor man poorer. [Applause.] · .

Mr. CLARK of Missouri. I yield four minutes to the gentleman from Missouri [M.r. RucKER] .

l\1r. :RUCKER of Missouri. 1\Ir. Speaker, I only want to say a word or two. If I have an opportunity, I am going to vote for the amendment proposed by the gentleman from Texas [Mr. HENRY]. I shall do so for the reason that I believe if this proposed amendment goes to conventions held by the people of the States that it will be adopted, and adopted speedily; but should it pass here without amendment and thus go to the States for ratification by state legislatures, I have grave fears as to the reception it will meet in certain sections of the country. I believe that the representatives of wealth, including some of the gentlemen who have - stood here to-day and pleaded almost piteously for the rich, will be strong enough in those States to prevent legislative action. Why, Mr. Speaker, the gentleman from Connecticut [Mr. HILL] announced a startling proposition a moment ago. He spoke of the two States of Rhode Island and Connecticut, two little States so devoid of fertility and pro· ductiveness of soil that the combined energies of their total population can not produce enough of the great staples of life in any one year to avert the horrors of a bread famine for the short space of twenty-four hours; and yet he told us that in those little, impoverished States, where the people are especially favored by the vicious, unjust, inequitable, cruel, robber tariff, riches have so accumulated and piled up around a few men that the wealth of those two States equals or is greater than the combined wealth of 35 of the great producing States of this Union.

I am in favor of an income tax. If I can not get the resolution amended as suggested, I will gladly vote for it as it is, because if adopted by the legislatures of three-fourths of the States, it will become a part of the organic law of my country, and it will make the rich constituents of the gentleman from Connecticut [1\Ir. Iln.L] pay a part of the revenues necessary to support the Government. It will make the constituents of the gentleman from New York [Mr. PAYNE] contribute from their wealth. It will make the rich constituents of the gentleman from Massachusetts . [l\1r • . McCALL] contribute their part; and with this amendment to the Constitution, no future Congress, , I trust, would even feel called upon or compelled to enact any such iniquitous law as the. pending tariff bill, thereby increasing the burdens of the people and extorting from them an additi o nal $200,000,000 in a single year for the clothes they wear. It would not then be necessary to again add from: 35 to 125 per .cent to the cost of cotton goods used in the homes of our country. This amendment to the Constitution would result in lifting from the backs of those already too heavily burdened-the poor of the country-a part of the burden of the Government, and placing it upon the shoulders of those most able to bear it-the rich. I heartily indorse and support the income-tax proposition. l would make a graduated income tax, and I would so · adjust the rates as to compel the millionaires of this country, who have been immune from taxation, to pay a just and liberal part of the revenues required for the support of the Government. [Applause on the Democratic side.]

for CLARK of Missouri. I yield :five minutes to the gentleman from Texas [Mr. Drns].

Mr. DIES. Mr . Speaker, I am for a graduated income tax. I welcome the day when the Republican party is driven to an admission, by their course in this Congress, that to tax the people is not to bless the people . [Applause on the Democratic side.] . I am for an income tax, not for the purpose of punishing the rich or exempting the poor from their just proportion of the burdens of taxation, but I am for it because it is a step in the direction of equality of taxation. For more than :fifty years the Republican party has preached the doctrine that tariff taxn . ­ tion . was productive of prosperity. They have contended, in effect, that to tax the citizen indirectly, by means of a tariff, was the proper and only method of creating wealth and maintaining the prosperity of the country. No greater encomium can ever be passed upon the wonderful natural resources of our country than the fact that the people have managed to make a living in spite of Republican taxation. Our fields are the most fertile in all the world, and yet if the farmer adds intelligence and industry to a fertile soil and produces an abundant yield he is told by the Republican party that he owes his prosperity to the tariff tax on agricultural implements and other articles of commerce entering into consumption on the farm. Our mines are richer than the fabled cave of Monte Cristo, but when the miner digs into the bowels of the earth and brings forth untold wealth for the use of man he is gravely assured that all of his good luck is due to the fact that the Republican party has required him to pay a tax on the tools with which he worked and the food and raiment with which he sustained himself. The American laborer in our factories, by reason of his superior skill, intelligence, and industry, nets to his employer greater profit than any laborer in the world, and yet this excellent toiler is sanctimoniously informed that he would be marched forthwith to the poorhouse if it were not for the boon he enjoys in being able to pay taxes on all that he eats and wears. And so the laborer in field and in factory, in mill and in mine, has been imposed upon and deceived by the craft and hypocrisy of Republican politics. Slowly, but surely, the American people are awakening from their long sleep upon the question of taxation . They are beginning to wonder how wealth can be created by taxa tiQn ; they are beginning to doubt the truth of the Republican theory that if you take a part of the people's wealth in taxes you nevertheless leave them wealthier than before.

What form of taxation could be more unjust than to tax a man in proportion to what he eats, wears, and uses? Is it fair and equal taxation to say that the poor laborer with a good appetite should pay more taxes on the meal that he eats than the surfeited millionaire with a poor appetite? Is it fair and equal taxation to demand that a · hard-working but poor farmer with a family of ten should pay ten times as much taxes to the Federal Government as the wealthy capitalist with no family at all? And yet such is the injustice which arises under a system which taxes · consumption instead of wealth. To say that a man should pay taxes in proportion to the shoes, hats , and clothes he is compelled to buy instead of in proportion to the wealth which he calls upon - the Government to protect for him is an economic absurdity and a flagrant legislative injustice. And yet this is the lullaby with which the Republican party has sung the people to sleep, while the pets of their tariff system have enriched themselves at the public expense beyond the wildest dreams of avarice. It is a damnable system which taxes want and exempts wealth-which takes toll from the clothes on the poor man's back and leaves untouched the rich man's bank.

I have the honor to represent in part the greatest State in the Union in point of domain, and which is soon to become the greatest State in the Union in point of population and wealth. We are not here to beg mercy at the hands of the Federal Government, but to demand justice. Among my constituents are many men of wealth, but I believe they are sufficiently intelligent and patriotic to concede the justice of an income tax. Many of my constituents are poor in this world's goods, but thank God they are rich in a manly spirit of independence, and all they ask at your hands is even and exact justice and a fair chance in the battle of life.

l\h:. Speaker, I · have advocated an income tax in season and out of season since I reached manhood's estate. I declared the justice of the doctrine in the days of its unpopularity; I proclai.med its fairness amid the jibes and jeers of men who taunted ml! with being a socialist and an anarchist. But the years have vindicated the advocates of an income tax, and I praise God for what mine eyes have seen and mine ears have heard during the course of this debate. ,, President, Senate, and House, Republican and Democrat, high and low, concede now that a tax on incomes is a just and equitable tax. And it is well that we do concede it here, for behind this movement is the righteous and insistent demand of the American people. · Let us rejoice and be exceeding glad, for it is a great day for the Democratic party, and what is more, it is a great day for the American people, when the Republican party is whipped into an admission that to tax the people is to burden and not to bless them. [Applause on the Democratic side.] And in that coming day of the revival of intelligence and patriotism, when the thought shall dawn upon the toilers of this country that to tax their food and clothing is a burdensome and unjust tax to be borne by them, the Republican party will be driven from the economic fallacy of a high protective tariff. What folly to sigh for the trade of the world while you throw up a tariff barrier to restrain and prohibit trade.

l\fr. Speaker, the Republican fallacy that taxation is a blessing and not a burden has inflicted this country with the most unparalleled extravagance known to the administration of civilized governments. While pretending to believe that you were creating wealth by a tariff tax, you have succeeded only in transferring wealth from the pockets of the many to the coffers of the few, and the people, under the spell of this delusion, have suffered you to waste the wealth of the Nation in reckless appropriations which ought to shock the conscience of every honest man. Give us an era when men can · see and understand that every . dollar of taxes exacted is a burden wrung from the toil of the people and not a Republican blessing in disguise and you will see less of wasteful extra vag::m c e and more of honest economy in the administr a tion of our affairs. So long HS the great body of the people pay all the taxes and the small but wealthy class receive all the benefit in the so- c alled "protection" of their industries, we may not hope for frugality and honesty in the public expenditure. But you shift the load of taxation from consumption to wealth, and demand that the rich pay upon their incomes, and you will hear a mighty cry go up from. the camps of plutocracy for economy at Washington. The Republican p a rty is b e ating a slow and sullen retreat, and it is a great day for the Democracy and the people to see them thus falling back in confusion and disorder from their Leipzig, because it means that they are approaching their proach. Waterloo. [Applause on the Democratic side.l

Mr. CLARK of Missouri. How much more ti.me have I left?

The SPEAKER pro tempore. The gentleman has eleven minutes.

Mr. CLARK of Missouri. I yield the eleven minutes to the gentleman from Arkansas [Mr. ROBINSON).

Mr. ROBINSON. Mr. Speaker, I wish this were a proposition that would enable this House to express its sense as to l whether the Congress desires an income-tax law or not. I . f should like it if the men who do the voting, the men who send us to Congress and keep us here, - could ha v e an opportunity of knowing the individual convictions of every Member of this Congress on this great subject.

There is but one way, Mr. Speaker, in which this could be accomplished. That is, by bringing in here a bill to impose an income tax. Any man with the courage of his convictions, who has honest political motives, ought to be willing that this Congress should express itself fairly and fully on the question whether we desire an income tax. Let us have a vote on it.

I once heard a Member of this body, who knows more about legislation here than any one man ought to know, say that all legislation is the result of compromise. If by the word "compromise" is meant an adjustment of differences in which no one who is primarily a party in interest gets what he wants, and one who deserves no consideration in the controversy gets the award, then this resolution is an illustration, Mr. Speaker, of the correctness of the assertion in that regard of the regular occupant of the chair. ·

Down in Arkansas two lawyers who had incurred the displeasure of a negro magistrate appeared in his court to try a hotly contested lawsuit, and they consented, at the suggestion of the magistrate, that they would abide any judgment which he and their clients might agree to. The magistrate promptly entered a judgment dividing the property between the litigants and ordered that the lawyers pay all the costs. [Laughter and applause.] This is a compromise resolution, which may defeat the people's demand for an income tax . .

The action, Mr. Speaker, of this Congress in postponing con· sideration _ of an income-tax law is a subterfuge pure a.nd simple.

Mr. COLE. Will the gentleman from Arkansas yield?

Mr. ROBINSON. I will yield to the gentleman.