ent, Secretary Chase, in his report to
Congress of the date of July 4, 1861, called attention to the
necessity of provision for a gradual increase in the revenue to
maintain the public credit, and to meet the current demands. His
recommendation as to internal taxes has already been referred to.
The act of August 5, 1861, previously mentioned, levied a direct
tax of $20,000,000 and an income tax. This act proved to be a
crude and imperfect measure, and it was modified or superseded by
the act of July 1, 1862. This act, carefully framed, was the basis
of the present system of internal revenue. It created a new office
in the treasury department, to be called the office of commissioner
of internal revenue. No less than thirteen acts of Congress were
passed prior to August 1, 1866, enlarging and defining the duties
of the office, and prescribing the taxes imposed by these several
laws. When this act was first framed we anticipated much greater
difficulties in the collection of the tax than actually occurred.
We had doubts whether the taxation imposed by this law would be
patiently submitted to by our constituents, but these misgivings
soon disappeared and the taxes imposed by that act were cheerfully
and promptly paid. I gave to the study and consideration of this
act, and the various amendatory acts, a large portion of my time.
At the end of the war internal taxes were cheerfully paid by the
people, and yielded far more revenue to the government than the
customs duties and all other sources of revenue combined.

The receipts from internal revenue for the first four years under
this law were as follows;

For the year ending June 30, 1863 . . . . $37,640,787
For the year ending June 30, 1864 . . . . 117,145,748
For the year ending June 30, 1865 . . . . 211,129,529
For the year ending June 30, 1866 . . . . 310,906,984

These taxes were mainly upon spirits, tobacco and beer, but they
also included stamp taxes of various kinds, special taxes on
particular industries, and income taxes, so that practically nearly
all forms of domestic manufactures were subject to a greater or
less tax, according to the nature of the article. So sweeping were
the provisions that it was frequently a matter of joke as well as
comment.

Some one remarked to Senator Collamer that everything was taxed
except coffins. He rejoined: "Don't say that to Sherman or he
will have them on the tax list before night!"

The general prosper